Preamble

The House met at half-past Two o'clock

PRAYERS

[MR. SPEAKER in the Chair]

PRIVATE BUSINESS

ABERYSTWYTH HARBOUR BILL

Considered; to be read the Third time.

FELIXSTOWE DOCK AND RAILWAY BILL

Order for consideration read.

To be considered upon Thursday.

HARROGATE BOROUGH COUNCIL BILL [Lords]

Order for consideration read.

Amendments agreed to.

To be read the Third time.

BROMBOROUGH DOCK BILL [Lords]

CLIFTON SUSPENSION BRIDGE BILL [Lords]

Read a Second time, and committed.

BLYTH HARBOUR BILL [Lords]

Order for Second Reading read.

To be read a Second time tomorrow.

Oral Answers to Questions — EMPLOYMENT

Clean-up Campaign

Mr. Bruce: asked the Paymaster General how many jobs he estimates the proposed clean-up campaign will create.

Mr. Terry Lewis: asked the Paymaster General if street cleaning is presently included within the framework of the community programme.

The Parliamentary Under-Secretary of State for Employment (Mr. Ian Lang): My right hon. Friend the Secretary of State for the Environment has recently announced a new environmental improvement initiative which it is estimated will initially provide work for up to 5,000 long-term unemployed people through the community programme together with additional opportunities for volunteers. A very wide range of worthwhile activities can be undertaken through the programme provided they involve work which would not otherwise be done and bring practical benefits to the community.

Mr. Bruce: I am sure that those who are unemployed will be grateful for the opportunity to take up work. However, does this scheme not show how much out of touch the Prime Minister is with the reality of what is

happening in Britain and that the opportunity should have been taken to restore some civic pride in Britain and give local authorities the resources to clean up their own streets?

Mr. Lang: I think that the scheme as envisaged, details of which will be announced by my right hon. Friend the Secretary of State for the Environment in due course, contemplates a much wider sphere of activities than would be confined within local authority activities.

Mr. Lewis: Is the Paymaster General aware that 155,000 jobs have been lost in local government in the manual sector, many of them street cleaners and the like? Rather than give youngsters skivvying jobs, would it not be a good thing to give rate support grant back to local government and let it do the job properly?

Mr. Lang: As I have just explained, the work planned for the initiative does not, to a large extent, fall within the scope of local authorities. The proposals will be wide ranging in their effect and I believe that they will have the wide and strong support of the vast majority of the people of this country.

Mr. Speller: When my hon. Friend helps to promote this excellent campaign, may we also ask that the resources be directed to the areas where unemployment is at its highest, such as the coastal areas of the west country, and that we look to that as well as to the over-employed south-east?

Mr. Lang: I thank my hon. Friend for his support. It will be a matter on which potential sponsors of individual projects within the overall programme can approach the board with their proposals. I am sure that they will receive sympathetic consideration.

Mr. Freud: Is the Minister aware that there are 331,000 people under the age of 25 who have been unemployed for over one year? Will he give precedence to those people when he is looking at applicants for community employment?

Mr. Lang: The community programme is specifically designed to help the long-term unemployed. Therefore, they will receive favourable treatment in that context.

Ms. Clare Short: Is the Minister aware that everyone in the country, except it seems the Prime Minister, is aware that our streets have been becoming dirtier and tattier for many years because of the squeeze on local authority expenditure and privatisation, which has reduced the number of people who are cleaning our streets? The answer is not to take on a trendy business man to take on more and more unemployed people at very low rates of pay and then dump them back into unemployment, but to give more money to local authorities to employ people on a permanent basis to do the job properly and reduce the numbers who are unemployed.

Mr. Lang: The hon. Lady is wrong. Local authority spending needs are fully taken into account in setting the level of expenditure for rate support grant purposes. The intention of the programme is not to replace the activities of local authorities as regards their refuse and litter collection. That remains their duty, and they will continue to have sufficient resources to carry that out. Nor will there be substitution for existing jobs under the community programme, the rules of which are specifically designed to avoid that.

Mr. Hancock: How long will the schemes last, and how will the clean-up campaign work with local government? Will it be an integral part of local government responsibility to find areas for these people to clean, or will the process be completely separate?

Mr. Lang: The hon. Gentleman will need to await the full details of the scheme from my right hon. Friend the Secretary of State for the Environment. However, there is no reason why local authorities should not also become involved in the project.

Trades Union Congress

Mr. Hoyle: asked the Paymaster General if he has any plans to see the Trades Union Congress to discuss industrial relations.

The Paymaster General and Minister for Employment (Mr. Kenneth Clarke): I have no plans at present to meet the Trades Union Congress to discuss industrial relations.

Mr. Hoyle: Why is it that neither the Secretary of State for Employment nor the Paymaster General will meet the TUC, yet they will meet any reactionary small employer? Why will they not meet the representatives of employees? Does it mean that the Government's policy is one of confrontation rather than consultation?

Mr. Clarke: The hon. Gentleman will agree that we have the best industrial relations that we have had for generations. The figures for the past 12 months show that the number of hours lost through industrial disputes is the lowest we have known for 24 years, and that the total number of strikes is the lowest for 50 years.

Mr. John Townend: If in the distant future my right hon. and learned Friend meets representatives of the TUC, will he discuss with them the adequacy of the safeguards for trade union members who wish to contract out of the political levy? Will he make it clear that if the undertakings given previously are not fulfilled the Government will not hesitate to change the law and move to contracting in rather than contracting out?

Mr. Clarke: We believe that members of trade unions have an undoubted right not to pay a contribution to a political fund if they do not wish to do so. We trust that the unions, some of whom have been less than frank with their members in their recent campaigns on political funds, will now carry out their obligations and make it clear to members that they do not have to pay for party political activities of which they do not approve.

Mr. Winnick: What about the right of working people to belong to a trade union? Is the Paymaster General aware that if he met the TUC it would express to him its strong opposition to the way in which people are being penalised at GCHQ for the mere crime of wanting to belong to a trade union? Why have the Government taken that democratic right away from our fellow citizens?

Mr. Clarke: I think that about 99 per cent. of employees at GCHQ have accepted the new conditions of service. The people who were recently disciplined in accordance with the Civil Service code originally undertook to accept those conditions and to renounce trade union membership, but went back on that undertaking.

Mr. Stokes: Is my right hon. and learned Friend aware that industrial relations are now generally so good in our

factories and that there are so few strikes that industrial workers can often set a good example to other professions with a less good record, such as the National Union of Teachers?

Mr. Clarke: I agree. Those industrial workers would be well advised to listen to the speeches of the hon. Member for Kingston upon Hull, East (Mr. Prescott), who continues to reiterate the Labour party's determination to repeal all of what he describes as Tory anti-trade union laws.

Mr. Prescott: Will the Paymaster General accept that more working days have been lost during this Government's period of office than during a comparable period under the Labour Government? I repeat that we shall repeal all that legislation. If the Paymaster General is so concerned about individual rights, why does he not reconsider his decision not to consult the TUC about the right of employees to belong to a trade union, the right of the printers to redundancy payments and the right to return to work when one has been found innocent, as is the case with the miners in the light of the Advisory, Conciliation and Arbitration Service decision?

Mr. Clarke: It seems that the Labour movement is having difficulty in describing what it is prepared to draw up as the individual rights of trade union members. I shall wait for some further formulation of the Labour party proposals before I comment on what the hon. Gentleman says. He is clear that he will repeal all the legislation and deny people the access to the courts that we have provided when they are aggrieved by union misconduct.
As to the total number of working days lost, the hon. Gentleman repeats a figure that he knows is entirely inflated by one dispute— the miners' strike, for which the Labour party argued throughout. Were he to repeal all the trades union legislation, the general picture of industrial relations would cease to reflect the improvements about which I have already told the hon. Member for Warrington, North (Mr. Hoyle).

Two-year YTS

Dr. Michael Clark: asked the Paymaster General what proportion of the funds allocated to the two year YTS programme will be used to assist young people to obtain skills and qualifications in engineering and science.

The Parliamentary Under-Secretary of State for Employment (Mr. David Trippier): About one-third of all entrants to YTS in 1985–86 joined schemes covering engineering and science. We are very conscious of the need for sufficient numbers of young people to be trained to secure the future of these vital sectors.

Dr. Clark: I thank my hon. Friend for that reply. As science and engineering are so vital to the British economy, as there is a shortage of potential employees with these skills, and as there are so many fine young people on the YTS who would benefit from science and engineering training, will he ensure that the expenditure on training in these skills is at least maintained, and possibly enhanced?

Mr. Trippier: I welcome my hon. Friend's question. It gives me an opportunity to pay a warm tribute to him for the interest that he shows in the YTS in general and in his constituency in particular. He has a valid point. We find the figures that I gave in answer to the substantive question very encouraging.

Mr. Madden: Have the Government not done immense harm to engineering and science by reducing the moneys available to such institutions as Bradford university and by presiding over the decimation of engineering apprenticeships?

Mr. Trippier: Perhaps the hon. Gentleman had framed his supplementary question before hearing my answer to the substantive question. The figure that I gave was extremely encouraging, and the trend shown by the figure is strengthening and developing all the time.

Mr. Rowe: Will my hon. Friend confirm that the experience of many of the admirable experiments that he has been carrying out shows that many young people who did not have formal qualifications from school have shown themselves remarkably adept at learning the skills needed in our modern society? Will he also confirm that worrying skill shortages are developing? Will he assure us that the YTS is being used imaginatively to bridge those two concepts?

Mr. Trippier: I give my hon. Friend precisely that assurance. It is one of the main aims of industry in 1986 that we should, wherever possible, match the skill shortages to those people coming off the YTS. Having seen the number of places that are available and the take-up, which exceeds 90 per cent., we are very encouraged.

Mr. Sheerman: If the Minister is genuinely interested in figures, has he seen the estimate by the Engineering Industry Training Board that we shall be short of 4,000 apprenticeships a year in engineering? Has he seen the figures given by Institute of Manpower Studies, which show that there is a lower level of employees in manufacturing industry in training than ever before? In 1967, 5·5 per cent. of employees were in training; in 1982 the figure was 3·2 per cent., and now in 1985, only 2 per cent. That means that there are only 112,000 young people in training in the whole of manufacturing industry. Is this not a condemnation of the Government's policies, and is it not time to have a comprehensive, compulsory training programme to get our country back to the training skills that it needs?

Mr. Trippier: Why does the hon. Gentleman refer to a training hoard that is compulsory? I cannot understand the connection between it and his question, because the training board that he mentioned is statutory, and is remaining.
I am sure that the hon. Gentleman would not wish to mislead the House — I know him too well for that. However, the ITBs said that that situation would occur unless more engineering employers invested in training instead of seeing it as cost.

Mr. Robert B. Jones: Is my right hon. and learned Friend aware that for the latest period for which statistics are available 71 per cent. of the YTS leavers in my constituency have gone into work and that one of the reasons for this great success is the emphasis on technology and science?

Mr. Trippier: I am grateful for my hon. Friend's question. Obviously we are looking forward to the time when the two-year YTS increases the percentage of people who find full-time employment.

Manpower Services Commission

Mr. O'Brien: asked the Paymaster General if he will make a statement on the reorganisation of the Manpower Services Commission.

Mr. Kenneth Clarke: The commission is reorganising in order to improve the management and delivery of our policies and programmes. From 1 July it will have three operating groups. These will be the employment and enterprise group, the vocational education and training group, and the skills training agency. They will be hacked by two support groups providing personnel, finance and management services.

Mr. O'Brien: Is the Paymaster General aware of the concern that is felt about their future by the skills training agency and the skill training centres, because the guarantee that was given to them terminates this year? Will the Paymaster General assure us that there will be no decrease in the number of skill training centres? May we also be assured that there will be a future for the centres? Furthermore, is the Paymaster General aware of the problems, emanating from his Department, of local members of the Manpower Services Commission because insufficient information is being made available to local organisations, such as Age Concern?

Mr. Clarke: There are two distinct points in the hon. Gentleman's question. First, skillcentres have been put on a trading account basis, which we believe will give management the incentive that it requires and to which it will respond in order to gear its training to the requirements of the labour market. The total amount of adult training that we are able to give and the number of people who are receiving adult training with Government assistance have been increasing. As to the second part of the hon. Gentleman's question, we are disseminating as much information as we can about all the Government's policies relating to job training and job opportunities. I commend to the hon. Gentleman and to Age Concern "Action for Jobs". That publication sets out very clearly the full range of the Government's measures on enterprise and employment.

Mr. Beaumont-Dark: Does my right hon. and learned Friend agree that Governments can do only so much? It is amazing that this very morning I received a letter from the wife of a constituent. He is a man with 35 years' experience, but because he is over the age of 52 the firm to which he applied for a job would not take him on, although it had vacancies. It is not just a matter of young people. Firms sometimes need to be encouraged to recognise that older people need job opportunities as well. There is nonsense about all this somewhere.

Mr. Clarke: I find that case as startling and disappointing as does my hon. Friend. Some of the people who are experiencing the greatest difficulty in our society are those who are above the age of 50 who have suffered redundancy because of industrial change. I am glad to say that our network of job clubs is expanding. It is providing jobs for about two-thirds of the people who join them, because they are motivated to seek work. I am glad to say that job clubs achieve surprising success for many of the older workers who approach them.

Mr. Wainwright: Will the Paymaster General ensure the appointment to these reorganised manpower quangos of some of those who are currently registered as unemployed,


or who have recently become unemployed, so that these committees may learn at first hand about the problems that they are trying to tackle and so that the Conservative party may practise the supremacy of the consumer, which it so frequently preaches?

Mr. Clarke: I hasten to add that these are not new committees. This is a reorganisation of the Civil Service staff of the Manpower Services Commission to enable the commission to be in an even better position than it is in at the moment to deliver the prgrammes which we have drawn up. Certainly there is a growth of employment within the MSC because of the emphasis that we are placing on its work, but I am glad to say that it is the general economy that is contributing each quarter to the continuing additional growth and additional new jobs that we are now experiencing.

Sir John Farr: Is my right hon. and learned Friend satisfied that the MSC programme dovetails properly with existing training programmes for skilled employees? I have in mind that in some big cities, such as Leicester, there is a desperate shortage of knitters and overlockers. They need a five-year training course. Will my right hon. and learned Friend satisfy himself that the MSC two-year programme, which is to be welcomed, dovetails effectively with this training?

Mr. Clarke: I very much hope that the MSC arranges matters in such a way that it does. I know about the particular problem in Leicester, where employers are unable to get the skilled and trained staff that they require. I know, too, that the MSC has been discussing with local employers how the knitting industry in particular can remedy that deficiency.

Mr. Park: Does the Paymaster General realise that his reply about the skillcentres adjusting themselves to the requirements of the labour market is much too facile? Does he not realise that, in order to change courses, very often one needs to train the trainers in the first place, or to go out and obtain different trainers? New equipment may be needed. The right hon. and learned Gentleman is putting that on a commerical basis. Where will the funds come from to do such gearing as a result of commercial demand? The Minister's hon. Friend has just said that sometimes courses need more time than they are given.

Mr. Clarke: It is not a commercial objective that one has in mind, except to the extent that training in skills is designed to fit people with the qualifications they require to find jobs that might be vacant in the local industry. If the hon. Gentleman continues to visit skillcentres, as I am sure he does—I visit them from time to time—he will find that they are responding to the challenge of changing the pattern of their employment and are finding exciting new tasks to perform for local industry in providing the skill shortages.

Mr. Budgen: Is my right hon. and learned Friend aware that many Conservative Members will applaud his new proposals for reverse discrimination in favour of young blacks in inner city areas? When my right hon. and learned Friend next adopts some of the more controversial measures of the Labour party, however, will he give us a little more notice so that we may loyally adapt our rhetoric to support him.

Mr. Clarke: My hon. Friend is adopting rhetoric which I have never used. If he moves on from his initial

indignation to study what I said in Birmingham yesterday, he will find that we were describing a policy of positive action to improve the employment possibilities in the district of Handsworth. The district of Handsworth has a multiracial population. Therefore, any success in our policies will have a multiracial effect. I am sure that my hon. Friend would not disapprove of that.

Mr. Evans: Will the Paymaster General tell the House whether extra funds will be made available to the MSC to enable it to carry out the various functions outlined in its new corporate plan? For instance, will extra funds be made available to assist the long-term unemployed, hundreds of thousands of whom are aged over 50 years? Specifically, will additional funds be made available for the MSC's programme of training and retraining, which is so essential?

Mr. Clarke: Since the Conservative party has been in government the MSC has received an enormous increase in the funds available to it for its work in the employment field. The budget of the MSC is continuing to grow. It is being expanded expressly, among other things, for the benefit of the restart programme, which will bring individual help to all the long-term unemployed in this country.

Alnwick and Amble

Mr. Beith: asked the Paymaster General whether he has any plans to increase the present range of measures available to stimulate the creation of employment in the Alnwick and Amble area.

Mr. Lang: We have no plans at present to increase the considerable range of measures available to stimulate the creation of employment in the Alnwick and Amble area. We are convinced that the new package of measures announced by my right hon. Friend the Chancellor of the Exchequer in his Budget statement will significantly benefit Alnwick and Amble as well as the rest of country by accelerating the growth of enterprise, boosting employment opportunities for the young and helping the long-term unemployed find work.

Mr. Beith: As the considerable range of measures to which the hon. Gentleman referred excludes all those available exclusively in development areas, will he use the figures available to his Department to convince the Department of Trade and Industry that, as prophesied, the unemployment rate in the Alnwick and Amble area has remained as high as and often higher than that in development areas and that further measures, including access to European funds, are clearly necessary in that unemployment black spot?

Mr. Lang: I am sure that the hon. Gentleman understands that a wide range of criteria, including the unemployment rate, industrial and occupational structures and changes in the labour supply, are taken into account in deciding on the designation of assisted areas. I draw to the hon. Gentleman's attention a number of measures that are applicable in his constituency—the YTS, the community programme, the enterprise allowance scheme, the job release scheme and the young workers scheme. All those schemes are detailed in our "Action for Jobs" booklet. The hon. Gentleman may also like to know that the restart programme began in his area yesterday.

American Tourists

Mr. Ron Davies: asked the Paymaster General what is the latest estimate of the number of tourists from the United States of America in the current year; and how this figure compares with 1985.

Mr. Trippier: Figures for the international passenger survey are available only for the first quarter of 1986 and show an increase in the number of visitors from North America of 15 per cent. We have no precise details as to the levels of American tourism subsequently. The British Tourist Authority, from its contacts with the industry, has advised that, if present levels continue throughout the year, there may be a reduction of up to 15 per cent., but there are signs of an early upturn in business and the BTA is hopeful that over the year as a whole last year's record level of American visitors may be maintained.

Mr. Davies: If the figure of 15 per cent. is correct, will the hon. Gentleman confirm that it will mean that this year the British tourist industry will lose about £150 million? Was it not clear in retrospect that the Government's involvement in the American bombing of Libya would inevitably lead to retaliation and to a loss of trade and jobs in this country? If the hon. Gentleman finds that loss acceptable, will he explain why the Government reject economic measures against South Africa, precisely because jobs will he lost in this country?

Mr. Trippier: The hon. Gentleman may have framed his supplementary question before he heard my answer. I made it clear in the latter part of my answer to the substantive question that we hope—British Airways has made this point—that by the end of the year there will be a recovery in the number of American visitors. To put the whole matter into perspective, it is important for the hon. Gentleman to accept that even if the 15 per cent. decrease in the number of visitors coming to the United Kingdom were to he the worst case, it would mean a drop of only 3 per cent. in real spending in the tourism sector.

Sir Kenneth Lewis: Does my hon. Friend agree that the shortage of American visitors to this country has little to do with the tear of terrorism but might have something to do with the not very satisfactory weather which we have from time to time? Does he agree that, above all, it is to do with the high value of the pound compared with the dollar? Will my hon. Friend make representations to hotels in London and other places to bring down their prices, because they are outrageously high?

Mr. Trippier: My hon. Friend makes a number of points. First, I should have thought that no American ever came to this country because of our climate. I think that we can dispense quickly with that reason. [Interruption.] There may have been an exception or two this year, but in normal circumstances the Americans certainly do not come because of our climate. Secondly, I think that the exchange rate is a factor. Thirdly, I believe that many people who have studied this subject in the past few weeks have got it wrong, in that they have assumed that the problem lies with the fact that a number of Americans are worried about whether the destination is safe. I suggest that they are more concerned about travelling on the aeroplanes than about safe destinations.

Mrs. Clwyd: If the hon. Gentleman is so confident about the recovery from the reduction in the number of

American tourists, will he explain why the Prime Minister grovelled on American television, begging American tourists to come here?

Mr. Trippier: I must apologise to the hon. Lady because I do not think that I heard correctly the last part of her question. She may have been saying that my right hon. Friend the Prime Minister made a statement on her way to the Tokyo summit to the effect that Britain was a safe destination. I should have thought that the hon. Lady and her right hon. and hon. Friends would support that. Certainly my right hon. Friend's statement helped to dispel the fears in the minds of some people who were concerned about coming to the United Kingdom.

Mr. Terlezki: Does my hon. Friend agree that the reduced figure for tourists is due to Labour propaganda, which plays into the Libyans' hands? Nationally and internationally, Labour supporters are the main contributors in stopping American tourists from coming to this country. They are as much at fault as the Libyans.

Mr. Trippier: Certainly some of the statements by Labour party spokesmen on this matter have not helped one iota. In addition, they have done nothing to assist our campaign with the British Tourist Authority in the United States and they take every opportunity they can to rubbish tourism generally.

Mr. Soames: Does my hon. Friend agree that we should do everything we can to persuade the Americans that we are serious about tourism in this country? Does my hon. Friend agree that, to that end, the decision of my right hon. Friend the Secretary of State for Transport to cancel the heli-link between Gatwick and Heathrow does nothing to promote the interests of tourism?

Mr. Trippier: I must apologise to my hon. Friend about that. It is not a matter for me, but I shall certainly draw those remarks to my right hon. Friend's attention.

Long-term Unemployment

Mr. Michael Forsyth: asked the Paymaster General what proportion of those registered as unemployed find work within the first six months; and if he will give details of the assistance being given by his Department to the long-term unemployed.

Mr. Lang: In 1985 around two thirds of those becoming unemployed left the unemployment count within six months. Under our restart programme everyone who has been unemployed for more than a year will now be contacted with an offer of positive help towards employment.

Mr. Forsyth: Will my hon. Friend confirm that, while we may tend to think of the unemployed as a static and unchanging group, 25 per cent. find jobs within four weeks, and 36 per cent. within six weeks, while half of them do so within three months and 82 per cent. find jobs within a year? Are we not therefore forced to the conclusion that among the long-term unemployed there must be at least an element that constitutes the black economy? Will my hon. Friend tell us the result of the pilot scheme that was carried out on the long-term unemployed in selected areas?

Mr. Lang: My hon. Friend is right in the facts that he gave to the House. With regard to restart pilot schemes, the fact that we have decided to extend them nationally


speaks for itself. The House might also be interested to know that as a result of the trends to which my hon. Friend has referred about 30,000 people in this country get a job every working day.

Mr. Ashley: Is the Minister aware that the assistance given to the long-term unemployed is hopelessly inadequate and that this probably reflects the Government's real attitude toward them, as distinct from the rhetoric of the Secretary of State? Although this assistance should be increased, is he aware that the real hope to be given to them is to provide them with the prospects of jobs? What is the Minister doing about that?

Mr. Lang: The right hon. Gentleman is wrong. May I refer him to our community programme, which is our main programme for the unemployed. It is being doubled in size. With regard to our restart programme, it is extending nationally and more than 90 per cent. of those interviewed have been given a positive offer towards employment. That demonstrates our commitment to the long-term unemployed.

Mr. Lord: I congratulate my hon. Friend on the restart programme, which will do everything possible to help the long-term unemployed. Because of the great interest that it has aroused, may I ask the Minister to publish the results of the scheme as quickly and as widely as possible?

Mr. Lang: I will do what I can to assist my hon. Friend. It is probably too soon to give a complete summary of the effect of the scheme so far. Suffice it to say that it is the most substantial effort that has ever been made in this country to help long-term unemployed people, who will benefit considerably from the schemes.

Mr. Prescott: Can the Minister help the House in the confusion over some of his replies? In an earlier answer he said that about 16 per cent. of those on job restart schemes had been offered something. The Minister has also mentioned the figure of 90 per cent. The Paymaster General, in a speech to the Institute of Directors, said that of all those on restart programmes, 90 per cent. are offered jobs. This does not seem to be borne out by the facts. Is this not another example of rhetoric racing ahead of the facts?

Mr. Lang: I must repeat to the hon. Gentleman that more than 90 per cent. of those who have been interviewed so far have been given some sort of offer under the restart programme. This can cover a wide range of activities, including a place on the community programme, or a training programme. In Crawley, which was one of the pilot areas, the hon. Gentleman might like to know that a third of those who were interviewed were offered a job vacancy.

YTS Leavers

Mr. Jim Callaghan: asked the Paymaster General what is his estimate of the number of the current year's YTS leavers who will not find full-time employment.

Mr. Trippier: We do not predict or estimate results in advance and it would be wrong to do so, but survey results covering those who left YTS between April and December 1985 show that around 60 per cent. had found employment and some two thirds had entered work, further education or further training.

Mr. Jim Callaghan: Is the Minister aware of the depth of real concern among parents, the youth of the country and the careers service about the lack of jobs for those youngsters who complete the YTS scheme? Will he tell the House exactly what the Government intend to do in the immediate future to provide real jobs for all our youngsters?

Mr. Trippier: I am sure that the hon. Gentleman would accept that no one, or no party, has a monopoly of concern about these youngsters who cannot find jobs immediately. That is precisely why we have introduced the new workers scheme. As part of the restart scheme under the action for jobs programme, we are of course very anxious to help these people.

Mr. Lyell: Is my hon. Friend aware that not all of us read the Paymaster General's Birmingham speech yesterday with liver-tinted spectacles and that some of us see much good sense in enabling those who have learnt skills on Government training schemes to put them into effect in a practical and commercial setting?

Mr. Trippier: I am sorry that my hon. and learned Friend did not have the opportunity to read the newspaper reports of the speech made yesterday by my right hon. and learned Friend the Paymaster General. However, if he had read them, he would no doubt have been impressed, as a whole new world would have been opened up to him.

Long-term Unemployment

Mr. John Evans: asked the Paymaster General what is the total number of unemployed in the United Kingdom; and how many of them have been unemployed for more than 12 months, two years and three years, respectively.

Mr. Kenneth Clarke: On 10 April 1986, the latest date for which figures are available, there were 3,325,000 unemployed claimants in the United Kingdom. Of these, 1,357,000 had been unemployed for over one year, 845,000 for over two years and 567,000 for over three years.

Mr. Evans: Will the Paymaster General acknowledge that the appalling unemployment figures, which have grown remorselessly since the Conservative party took office, are a disgrace to a civilised society? Does the right hon. and learned Gentleman accept the suggestion of the Employment Committee that those who have been out of work for more than three years should be offered a job for 12 months? The chairman of the Manpower Services Commission has accepted that as a feasible proposition. Will the Paymaster General give some concrete help to those 560,000 people who have been out of work for more than three years?

Mr. Clarke: I accept that the figures show that we must continue the pace of new job creation, if possible at an accelerated rate, in order to get on top of the demographic pressures, which mean that all the time more young people and women are entering the labour market. The hon. Gentleman will know that there has been an increase in the total number of jobs in every quarter since 1983. We expect that to continue, and we also expect our record to continue to be better than that for the rest of the EEC. That is obviously the Government's main effort at present.
We are about to have a debate on the Select Committee's proposals, which have been modified in the


light of the Government's initial response to them. I shall be explaining to the House that our restart programme and our expanded community programme already offer very tangible help to the long-term unemployed at a very considerable cost to the taxpayer.

Mr. Ralph Howell: Is my right hon. and learned Friend aware that in my constituency, which has above average unemployment at almost 15 per cent., one of our biggest problems is the recruitment of labour? Is it not ironic that that should be the case when 3·3 million people are classified as claiming unemployment benefit, even though we know that many of them are not genuinely unemployed? Has my right hon. and learned Friend experienced similar labour shortages in his constituency?

Mr. Clarke: I suspect that the situation in my constituency is rather similar to that in the constituency of my hon. Friend. However, under our restart programme, we shall be approaching each of the 1·4 million people who are registered with us as being long-term unemployed. We shall be able to steer them towards the growing number of job vacancies that are notified to us, as well as towards training and a whole variety of other measures designed to get them back into work. Of course, if someone is not genuinely available for work, he should not be receiving benefit and he should not he registered as unemployed. We shall seek to ensure that that is so.

Mr. Lofthouse: Will the Paymaster General now revise the travel-to-work area boundaries in mining communities such as mine, where there has been a rapid growth in unemployment as a result of the savage pit closure programme?

Mr. Clarke: The south Yorkshire area — [Interruption.] The west Yorkshire has been very badly affected by the recent inevitable changes in the coal industry. Obviously that area will benefit in particular from the programme of help that we set out in "Action for Jobs", and from the sort of support that we are about to offer through the restart programme.

Enterprise Agencies Scheme

Mr. Kenneth Carlisle: asked the Paymaster General how many new businesses have been started under the auspices of the enterprise agencies scheme.

Mr. Trippier: As regards the number of businesses assisted by local enterprise agencies, survey information collected on behalf of Business in the Community in May 1985 indicated that 83 agencies replying to a question on this had helped 8,269 new businesses. That survey is being repeated this year, funded by my Department, and it is hoped that more comprehensive information may become available.

Mr. Carlisle: May I thank my hon. Friend for his recent visit to Lincoln and for his great encouragement of our enterprise agency? Does he accept that the figures that he has given show that enterprise agencies encourage jobs? During my hon. Friend's visit to Lincoln, he saw how a derelict building had been converted by the enterprise agency, using the community programme, in order to provide start-up units for new businesses. As there are thousands of derelict buildings around the country, could not that idea be developed further for the creation of new businesses and jobs?

Mr. Trippier: I was very impressed when I had the opportunity to visit my hon. Friend's constituency and see what his local enterprise agency was doing, particularly with the innovation centre that I had the privilege to open. I think that he is absolutely right. We have perhaps learnt our lesson in the last few years in that it is a little silly to look for purpose-built premises of a certain size. We should rather be trying to look for space that is, say, little more than a garage space, often in a derelict building, to convert to the appropriate use so as to give the people whom we are seeking to encourage the first foot on the rung of the ladder of enterprise.

Oral Answers to Questions — PRIME MINISTER

Engagements

Mr. Hirst: asked the Prime Minister if she will list her official engagements for Tuesday 24 June.

The Prime Minister (Mrs. Margaret Thatcher): This morning I had meetings with ministerial colleagues and others. In addition to my duties in this House I shall be having further meetings later today. This evening I hope to have an audience of Her Majesty the Queen.

Mr. Hirst: Has my right hon. Friend had time today to read the article in the Daily Telegraph by Norman Stone, Professor of Modern History at Oxford, pointing out that sanctions have never yet succeeded in altering the domestic policies of any country? Will she reaffirm her Government's commitment to an early ending to apartheid and to the economic and political advancement of all races in South Africa, and will she resist any measures that destroy the jobs and living standards of black people in that country and the jobs of thousands of people in this country?

The Prime Minister: I gladly confirm what my hon. Friend has said. We seek an early end to apartheid and the advancement of all races in the political government of South Africa, and we seek, further, the suspension of violence on all sides in return for negotiations to achieve the end defined by my hon. Friend.

Mr. Hattersley: May I first congratulate the Prime Minister on wisely changing course and agreeing to the meeting between the Minister of State, Foreign and Commonwealth Office, and Mr. Oliver Tambo. May I go on to assure her that, if she follows the logic of that decision and decides to stand out against the extreme Right-wing pressure on her Back Benches, the Opposition will support that change of course. If she continues either to prevaricate about sanctions or to pretend, as she did a moment ago, that they will not change the policy of the regime in Pretoria, how does she propose to bring about a change in South Africa?

The Prime Minister: May I point out that my hon. Friend's purpose in seeing Mr. Tambo will be to tell him that suspension of violence on all sides is essential to peaceful change in South Africa. The right hon. Gentleman talks about change of course. He has changed course perhaps more than anyone else. As a Minister of State at the Foreign Office, he said:
I do not believe that a policy of general economic sanctions would be in the interests either of the British people or of South Africa."—[Official Report, 7 July 1976; Vol. 914, c. 1354.]

Mr. Hattersley: I am grateful and flattered by the Prime Minister's interest. On that exact point, does she understand that the sanctions that will be most effective are not general economic sanctions but financial sanctions? Let me therefore ask a specific question. If the international community loses faith in the South African economy and withdraws capital from South Africa, will she and the Chancellor bolster up the Pretoria regime by rescheduling South African debts?

The Prime Minister: I gather from the right hon. Gentleman that he is against general economic sanctions against South Africa. I am grateful to him for making his position clear. We, too, are against general economic sanctions, as I have made clear on many occasions. We have carried out the measures that I indicated last time. We shall now consider the position with our EEC and Commonwealth partners.

Mr. Hattersley: We are all used to the combination of prevarication and bluster that—[Interruption.]

Mr. Speaker: Order.

Mr. Hattersley: On this occasion—[Interruption.]

Mr. Speaker: Order. These interruptions take up time.

Mr. Hattersley: On this occasion, the Prime Minister's technique does more than its usual damage to her electoral prospects. Does she not realise that by prevaricating about the racist regime in South Africa she is giving it comfort and support and encouraging its continuation?

The Prime Minister: The right hon. Gentleman is talking nonsense in his usual blustering fashion. Moreover, he knows that the debts are not Government to Government, but commercial.

Mrs. Ann Winterton: Bearing in mind the old saying that those who live in glass houses should not throw stones, will my right hon. Friend tell those members of the Commonwealth, such as Zimbabwe, to put their own houses in order before calling for sanctions against South Africa?

The Prime Minister: The system of apartheid must end, and I do not believe that general economic sanctions would help it to end. They would he highly damaging, both to black interests in South Africa and to employment in this country. In the end, there will have to be negotiations between the South African Government and black South Africans, and we should keep our eye on that purpose and do everything possible to achieve it.

Mr. Steel: Does the right hon. Lady agree that the advantage of the suggestion in the report of the Commonwealth Eminent Persons Group that intercontinental air links with South Africa should cease is that that is specific and easily policed? Is she further aware that gesture politics, which the right hon. Lady so despises, also include the gesture of doing nothing or being seen to he dragging one's feet—the most impossible posture of all for any Government?

The Prime Minister: To do anything about air links would be very damaging, not least to some 800,000 people in South Africa who have the right to come to this country. I note that the right hon. Gentleman does not share the views of his right hon. Friend the Member for Plymouth, Devonport (Dr. Owen), who in an article on 24 March 1985 said:
Total or even selective trade sanctions will not succeed.

Mr. George Gardiner: While none of us expects my right hon. Friend to reveal in advance the proposals that she will put to her colleagues in The Hague this week, can she assure us that nothing that she does there will be at variance with the policies and the principles that she has described and hitherto defended resolutely in this House?

The Prime Minister: I shall do my level best at the European economic summit, as at the Commonwealth conference, to bring about change in South Africa through a process of negotiation between the Government of South Africa and full representation of the black population, in the absence and suspension of violence.

Mr. Hardy: asked the Prime Minister if she will list her official engagements for Tuesday 24 June.

The Prime Minister: I refer the hon. Gentleman to the reply that I gave some moments ago.

Mr. Hardy: As NACODs is holding its annual conference this week, may I remind the right hon. Lady that at last year's conference members of the association still believed that she knew what she meant by the use of the word "sacrosanct"? In order to keep the record straight and to maintain the international regard for the integrity of her office, does she now accept that she, her Government and their new knight seriously misled both the House and my association?

The Prime Minister: No, and the hon. Gentleman knows that.

Mr. Nicholls: Does my right hon. Friend agree that one of the many false assumptions about South Africa is that Bishop Tutu speaks exclusively for black Christians, or even the majority of them? Is she aware that while Bishop Tutu has a congregation of less than 150,000, Bishop Makoena of the Independent Reformed Church has a following of more than 4·5 million? Is it not essential that any steps that we take against South Africa have the effect of supporting moderate black leaders such as Bishop Makoena — who is vehemently opposed to sanctions—and not undermining their position?

The Prime Minister: It is absolutely vital to support moderate leaders in South Africa. It is also vital to support those many industries that have been in the forefront in trying to break down apartheid. To introduce sanctions against them would be to defeat the very people who have been trying to bring about the required change in South Africa.
It would be utterly callous to put large numbers of black South Africans out of work, to create unemployment in their country, and then to create additional unemployment in this country.

Mr. Straw: asked the Prime Minister if she will list her official engagements for Tuesday 24 June 1986.

The Prime Minister: I refer the hon. Gentleman to the reply that I gave some moments ago.

Mr. Straw: As the Prime Minister has claimed in the House today that sanctions would be highly damaging to British employment levels and has suggested that up to 150,000 jobs in this country might be at risk, how does she square those claims with the fact that when I asked for details of the likely effects on jobs and output in the United Kingdom of different levels of economic measures,


sanctions and of the non-imposition of sanctions on South Africa, I was told late last night in a parliamentary answer by the Minister for Trade that
the information was not available"?
Does that answer not show that the Prime Minister's own claims about the effects on unemployment are simply scare tactics?

The Prime Minister: If the hon. Gentleman looks back he will find answers from me about how the figures are calculated. They are calculated by the general value of exports from this country to South Africa and the number of jobs that that would normally be equivalent to.

Sir John Biggs-Davison: Have Her Majesty's Government, with other Commonwealth Governments, any contingency plans to deal with the collapse of the economy of Zimbabwe and other neighbours of South Africa in the event of the intensification of sanctions against the Republic of South Africa?

The Prime Minister: No, Sir. As my hon. Friend is aware, that is a matter that could concern us a great deal, because so much of the imports of Zimbabwe and the other front-line states, and the exports from these countries, have to go by the roads or the rail bridge at Beitbridge between Zimbabwe and South Africa. Any major sanctions would have devastating effects on the future of those countries.

Mr. Eastham: asked the Prime Minister if she will list her official engagements for Tuesday 24 June 1986.

The Prime Minister: I refer the hon. Gentleman to the reply that I gave some moments ago.

Mr. Eastham: As the Prime Minister is a leading voice in the Commonwealth, may I draw her attention to the recent terror bombing incident by the South African Government against three independent African countries, which are also members of the Commonwealth? Other than making a protest, will the Prime Minister tell the House what representations she is making to South Africa regarding compensation? Will there be any retaliatory action against South Africa?

The Prime Minister: The hon. Gentleman has heard me say in the House before that we replied very sharply indeed to South Africa — [Interruption.]—about those terrible bombing incidents, which were responsible for bringing to an end the effective operation of the Eminent Persons Group. Without those incidents, that group had a chance of getting through to negotiations, with a suspension of violence on all sides.

Mr. Favell: Does my right hon. Friend agree with Mr. Russell Hopkins, a consultant surgeon recently appointed

as the general manager of a hospital in Cardiff, that doctors cannot demand with total honesty more cash for the Health Service until waste has been eliminated?

The Prime Minister: As my hon. Friend is aware, we are doing our level best to secure the more effective use of resources in the Health Service. Resources have increased enormously under this Government, from £7·75 billion in 1979 to £18·75 billion this year. Last year the efficiency savings amounted to £150 million. Those savings were ploughed hack into the Health Service to secure more treatment for patients.

Mr. Strang: asked the Prime Minister if she will list her official engagements for Tuesday 24 June 1986.

The Prime Minister: I refer the hon. Gentleman to the reply that I gave some moments ago.

Mr. Strang: Will the Prime Minister accept that the ultimate responsibility for nuclear safety must lie with the elected Government? Is she aware that the two-month delay in the commissioning of Torness announced by the Nuclear Installations Inspectorate is quite inadequate? After Chernobyl, is it not clear that we need a national plan—if not a national emergency force—to cope with such an accident? Would it not be the height of irresponsibility to go ahead with the commissioning of a new power station before the Nuclear Installations Inspectorate, the Health and Safety Executive and Government Departments have had the chance to complete their post-Chernobyl reviews?

The Prime Minister: I was asked an identical question last week. Our Nuclear Installations Inspectorate is one of the best in the world. It has a superlative record. Not long ago some of the hon. Gentleman's colleagues were preferring the AGR to any other type of reactor.

Mr. Dykes: Does my right hon. Friend entertain the hope that the first ministerial contact with Mr. Tambo of the African National Congress will be the precursor to further contact with what is essentially a moderate nationalist movement and its domestic equivalent, the United Democratic Front? Will she and others bear in mind, in their proper exhortations to both sides to renounce violence, the fact that the majority of the violence emanates from the South African security forces?

The Prime Minister: I have already said that my hon. Friend's main task, when seeing Mr. Tambo tonight, will be to say that there must be a suspension of violence on all sides. That is essential to peaceful change in South Africa, and she will reiterate that most strongly.

Sheepmeat (Caesium Levels)

The Secretary of State for Scotland (Mr. Malcolm Rifkind): With permission, Mr. Speaker, I should like to make a statement on the control on the movement and slaughter of sheep in Scotland.
The results of tests on sheep in slaughterhouses in Scotland, the latest findings from which were published yesterday, give no cause for concern. We now have results of tests on young lambs in Scotland. These results are being published today. Generally, they are satisfactory. No readings have been obtained comparable to the highest in north Wales and Cumbria, but there are five readings over 1,000 bq/kg for caesium-134 and caesium-137 together, which is the limit at which, by international recommendation, action should be considered. One of these readings, the lowest of the five, comes from Easter Ross and, at 1,017 bq/kg, is within the margin of sampling error. Three of the other readings were found in Dumfries and Galloway, including the highest at 1,272 bq/kg, and the remaining reading is from Arran.
The animals tested were only two to three months old and will not be ready for market for some weeks yet, by which time the level of radioactivity may be expected to have declined well below the 1,000 bq/kg level. I can say categorically therefore that there is no danger to public health and no reason for consumers to refrain from purchasing and eating lamb.
It is Government policy to insist on the highest levels of safety and, to keep under supervision lambs in those areas of Scotland where relatively high levels of radioactivity have been identified, I have made an order, which will be laid before Parliament, to come into effect today, to prohibit for the next 21 days the movement and slaughter of sheep in Dumfries and Galloway, Arran and Easter Ross.
Monitoring in these and other areas will continue and the restrictions will be reduced or removed as soon as testing confirms the expected fall in levels.
I recognise that these measures may cause some interference with the marketing plans of some farmers in the areas concerned. I am sure that they will understand why this action is being taken. In this connection, I must pay tribute to the responsible and co-operative attitude shown by the National Farmers Union of Scotland. If it should prove necessary, the Government will be prepared to discuss cases of compensation for severe loss in particular circumstances to specific farmers.

Mr. John Home Robertson: I fear that the right hon. and learned Gentleman's assertion that there is no danger is likely to be about as reassuring as Corporal Jones telling Dad's Army not to panic.
May I thank the right hon. and learned Gentleman for not following the Minister for Agriculture, Fisheries and Food, who tried to smuggle his statement through an empty House on a Friday? What percentage of the samples analysed showed excessive levels of caesium, and how many farms and how many sheep are affected by the new restrictions? It must be said that there is no way in which farmers can he held to blame, so Will the right hon. and learned Gentleman say more about compensation?
We should stress that the summer lamb sales are virtually the only source of income for many farmers in

Dumfries and Galloway, Arran and Easter Ross. These restrictions could have disastrous effects. During the course of the restrictions lambs could become unsaleable, and the House should insist that the Government accept responsibility for compensating farmers affected by the restrictions—and that should apply not only to farmers whose loss has been assessed as severe in terms of the Minister's statement.
What is being done to cover the effect on the sheep variable premium system of the 25 per cent. collapse in market prices which has already followed the announcement made by the Minister of Agriculture on Friday? May I press the Minister further about contamination of land and farm produce, and remind him that, on 6 May, the Secretary of State for the Environment promised the House that the Government would be explicit, frank and open about that matter?
For several weeks there has been much press comment about hot spots of caesium contamination. How long has the Secretary of State known about those hot spots and how much farm produce — that means milk and vegetables as well as lamb—has been moved from those areas in recent weeks? What does he say to the people who have bought and eaten that food? Can we now have a full public report on all aspects of this monitoring exercise?

Mr. Rifkind: The degree of public alarm will be significantly influenced by whether the Opposition take as responsible an attitude towards this matter as the Government have taken. The hon. Member for East Lothian (Mr. Home Robertson) should pay careful attention to the responsible attitude taken by the National Farmers' Union of Scotland. The hon. Gentleman sought to cast aspersions on my right hon. Friend the Minister of Agriculture for making his statement on Friday. The hon. Gentleman knows perfectly well that my right hon. Friend introduced the statement at the first available opportunity, and the hon. Gentleman and his hon. Friends would have been the first to criticise my right hon. Friend if he had not done so.
In reply to the hon. Gentleman's detailed questions, I can tell him that 100 samples were taken from 50 sheep. Some five were shown to be over the level of 1,000 bq/kg. Although in all cases the amount over 1,000 has been relatively marginal, some 17 per cent. of the total number of sheep in Scotland will be affected by the order. The hon. Gentleman asked about compensation. I can only draw his attention to what my right hon. Friend the Minister of Agriculture said on Friday about the matter, which I have repeated in my statement. The hon. Gentleman asked how long I have known about the specific results from the monitoring. The figures started coming in yesterday, when I was first informed, and this morning the decision was taken to make the statement that I have made to the House.

Mr. John Corrie: Is my right hon. and learned Friend aware of the dismay that this will cause to my farmers on the island of Arran? Can the Minister give us some information about beef? Is the same sort of monitoring being done for beef animals as for sheep? What is the situation about private slaughter? Does the Order totally cover the slaughter of all sheep in these areas? Do we use the same scale of monitoring as is used in other European countries?

Mr. Rifkind: The level of 1,000 bq/kg is the internationally recognised standard; that is why the Government think it right to take the action that we have described. I share with my hon. Friend the Member for Cunninghame, North (Mr. Corrie) the dismay that will be felt by farmers who are affected. However, they were the first to say that they understand entirely the reasons why steps of this kind might be necessary and they are fully prepared to co-operate with the Government in the action that we are taking. I can assure my hon. Friend that all the beef sampling suggests that there is no comparable difficulty. I can confirm that the ban on slaughter will apply to all sheep in the areas designated.

Sir Russell Johnston: The Minister must not be touchy about this matter, as he was with the hon. Member for East Lothian (Mr. Home Robertson). If a member of the public is told that there is no problem at all and no danger whatever, and then told in the next breath that there will be a ban on slaughter, he is puzzled, and that is perfectly understandable. I am not asking the Minister to deliver a lecture in simple science, but would it not be helpful to everybody if he made some attempt to explain clearly what caesium is, what effects it has, how its radiation compares with the radiation from other known sources, and why it is that we are concerned only about sheep and not apparently about cattle, or for that matter about fish?
The hon. Member for East Lothian asked about compensation. Would it not be fair to ensure that farmers receive the guaranteed price for lamb and will the Minister do anything about those in abattoirs and the hauliers?

Mr. Rifkind: The hon. Gentleman has asked a perfectly reasonable series of questions in a perfectly constructive way. The three areas have been designated not because there is any immediate danger to the health of the public but because, by designating those areas and preventing the movement of sheep outwith those areas for 21 days, it will be easier for us to monitor the sheep in those areas where lambs have been found with a level of radiation which is not at a dangerous level but which is slightly above the level at which we would normally begin to consider action.
Let me put the matter properly in perspective by saying that if we look at the most potentially vulnerable members of the community—young children—a 10-year-old child could consume more than 12 oz of lamb, much higher than most would wish to consume, with 1,000 bq/kg, every week for a year and would still receive less that one eighth of the body dose level at which, by international recommendation, action should be considered.
We have had to take into account the fact that there is no risk to the public at the moment, nor in the foreseeable future, but because the public quite properly expect the Government to apply the highest standards of safety it is right and proper to take this opportunity to monitor carefully lambs in the designated areas which, although at the moment not due to go to the slaughterhouses, will be due to go in several weeks time. Therefore, it is right and proper that we should be able to give total reassurance not only now but in the weeks to come.

Mr. Nicholas Fairbairn: Will my right hon. and learned Friend reassure the public that, in applying these safety measures, the public are not at risk and that they are at greater risk from walking along the streets of Aberdeen because of the radioactivity of Union

street, from having an X-ray or from looking at an alarm clock? Will he also take into account that, as the public will not know from where their lamb comes, it will do harm to farmers in areas such as Perthshire who are not nominated? Will he take this opportunity to condemn the Socialist Republics of Russia for the assault on humanity which it tried to keep secret?

Mr. Rifkind: My hon. and learned Friend is right to draw attention to the absolute safety for the public. The average member of the public absorbs a dose of radiation from natural sources of 2mSv a year and the total dose for a year for the average consumer, assuming that he eats meat at the average consumption rate throughout the year of 5 kg, would be 0·15 mSv. That again illustrates that it is perfectly safe for the housewife to continue buying lamb and I recommend that hon. Members and the public as a whole continue to eat it.

Mr. Donald Stewart: Is the right hon. and learned Gentleman aware that his statement will give rise to great concern and indeed anger in Scotland in the light of the lapse of time between this announcement and the accident taking place in Russia? Did the monitoring take place before or after the discovery of radioactivity in sheep in Wales? Will he guarantee to the Scottish people that there will be total monitoring of animals for slaughter, and of root crops, grass and water in Scotland?

Mr. Rifkind: Of course we are doing general monitoring. For some considerable time now we have been monitoring sheep at the slaughterhouses because it is at that stage that sheepmeat would normally enter the food chain. It was only with evidence that young lambs with several weeks to go before they were likely to reach market had abnormally high levels of caesium that it seemed sensible to have similar monitoring in Scotland. Because the figures show that in some areas levels are slightly higher than the level at which we would usually consider taking action, it seems right and proper to make the order that I have described today.

Mr. Barry Henderson: Can my right hon. and learned Friend confirm that the worst fall-out in Scotland from Chernobyl has not amounted to as big a close as someone would get from an X-ray in hospital? Would my right hon. and learned Friend agree that the reason why there should be no anxiety on the part of the public is that the Government have been extremely cautious in making such arrangements, which allow the public at large to buy meat in the shops with confidence knowing that it will do no harm to them or their families?

Mr. Rifkind: The average exposure from X-rays during the course of the year is almost exactly the same as would be the total dose in a year to the average consumer of 5 kg of lamb at 1,000 bq/kg level of radiation. That puts the matter in its proper perspective.

Mr. Ron Brown: To stop those anxious to make a fast buck irrespective of safety standards, will the Secretary of State ensure that all meat — all beef and lamb products in butchers' shops and supermarkets— is checked, bearing in mind that we do not always know the source of those products? Not all of them come from Scotland.

Mr. Rifkind: Lamb or other products which enter the United Kingdom can be monitored. Various steps are


taken to ensure compliance with international recommended actions. It is only with regard to young lambs several weeks before they are due to go to market that the problem appears to have arisen. Therefore, it is in that area——

Mr. Ron Brown: Appears?

Mr. Rifkind: Of course, we can only go on the basis of the evidence that we have. The hon. Gentleman would not wish to be so irresponsible as to suggest anything beyond that.

Mr. Michael Forsyth: Would my right hon. and learned Friend confirm that caesium is a short-lived isotope, that becquerels are a measure of disintegration rather then the energy of radiation and that the risk to public health is minimal? Will he take this opportunity to repudiate the remarks of the hon. Member for East Lothian (Mr. Home Robertson) and other Opposition Members who, as part of their campaign against nuclear power, are deliberately whipping up public hysteria on this matter and adding to the burden of hard-pressed farmers in Scotland?

Mr. Rifkind: The biological half-life of caesium is about 20 to 30 days. Therefore, there will clearly be continuing reductions as the days go by in the level of radiation to levels which are very small. I have already shown that I believe that there is a duty on the Opposition, as much as on the Government, to try not to cause needless alarm in areas where there is no danger to the health of the public.

Mr. George Foulkes: If the Secretary of State is claiming openness and honesty in this matter, can he tell the House why Ministers overruled the advice of Government scientists that milk should not be drunk in Scotland for two weeks after the events at Chernobyl? Will he also say why the information in relation to the regular monitoring of sheep thyroids in Caithness being transmitted to MAFF laboratories in Weybridge is classified? Will he arrange for that information to be declassified? Otherwise, in this and other matters, he will be continuing the attitude of the Government towards this whole issue, which is one of secrecy and complacency.

Mr. Rifkind: The hon. Gentleman is being utterly absurd. First, he should address any questions on MAFF to my right hon. Friend the Minister of Agriculture. Secondly, with regard to the question of overruling advice from my officials on the banning of milk, I have to say that at no time did I receive any advice from any of my officials to ban the consumption of milk. Therefore, there was no advice for me to even consider, much less reject. The hon. Gentleman should check his facts before he makes foolish allegations.

Mr. Teddy Taylor: As these events and the Opposition's irresponsible reaction to them have caused a sharp fall in the price of lamb, would the Secretary of State explain whether that loss is paid for by the farmer or by the taxpayer through the deficiency payments system? Could he give us some indication of the extra cost to the taxpayer of the fall in lamb prices?

Mr. Rifkind: It is not possible at this stage to give any indication of what the implications for lamb prices will be over an extended period. However, we have said that if any

individual farmer suffers from severe economic loss, we shall be prepared to consider compensation. I cannot usefully go beyond that at this stage.

Mr. Robert MacLennan: Has the monitoring of food products now been sufficiently extensive to enable the Secretary of State to say that he is satisfied that there is no risk of consumption of irradiated or contaminated products in Scotland, outside the matters of his statement today? While I fully accept the necessity of what he has done, does he realise that it will have a damaging effect, not only on the individuals in the areas where the movement has been restricted, but on the market generally, despite his undoubtedly justifiable reassurances? Experience in Wales and Cumbria suggests that a compensation scheme will be necessary for individuals, and that the income of sheep farmers generally will take a severe knock. The Government must bear that in mind.

Mr. Rifkind: If anything, the Government could be criticised for being over-cautious and for imposing safeguards which may be beyond what is absolutely necessary for public health. The public would expect us to err, if we were to err, on that side rather than in the opposite direction. One appreciates that in such circumstances there is some uncertainty, which can have implications for the farming community. For that reason, I paid tribute to both the National Farmers Union of England and Wales and the National Farmers Union of Scotland for their constructive response at this difficult time for their members.

Several Hon. Members: rose——

Mr. Speaker: Order. I remind hon. Members who represent English constituencies and who seek to catch my eye that the matter refers to Scotland.

Sir John Farr: I congratulate my right hon. and learned Friend on the sensible precautionary step that he is taking. In the long term, will he look at the Food and Environment Protection Act 1985 in which we endeavoured to set out a framework for the role of proper consultation and compensation to deal with natural and man-made disasters of this nature? I mention that to my right hon. and learned Friend because the relevant orders from that Act will shortly be coming before the House. Could we not include an order to cover this sort of eventuality in future, as some of us wanted to do at the time?

Mr. Rifkind: I am grateful for my hon. Friend's suggestion, which I shall certainly consider.

Mr. Tam Dalyell: For 19 years successive editors of New Scientist have thought me sufficiently responsible about nuclear and other industries to write a weekly column. I do not take it easily or kindly to be told that I am irresponsible about these matters. Can I press the Secretary of State on his answer to my hon. Friend the Member for East Lothian (Mr. Home Robertson) that he was first informed yesterday? The heavy rain fell on 3 and 4 May. I am informed that MAFF in England was told of the problem of caesium-134 and 137 in mid-May. Are we being told that the Scottish Office was not informed by MAFF, and that the responsible journalism about when MAFF was first told, which we have all read, is completely wrong? I believe that the Secretary of State may not have been informed, but what about his officials and the Under-


Secretary of State for Scotland, the hon. Member for Argyll and Bute (Mr. MacKay)? When was the Scottish Office first told? It is incredible to many of us that the Secretary of State should give the impression that he was first informed yesterday, although a good deal of information was available in mid-May.

Mr. Rifkind: The hon. Gentleman is suffering from a considerable misunderstanding. He should know, and if he does not he can read it in the Official Report tomorrow, that I was referring to the specific monitoring done on young lambs in Scotland during the past few days. He should also be aware that the Ministry of Agriculture, Fisheries and Food first received its figures for young lambs last week, and that, as a consequence of that, a statement was made by my right hon. Friend the Minister of Agriculture, Fisheries and Food last Friday. We initiated our monitoring in the light of the figures that were emerging on young lambs in England and Wales, and as a consequence we have decided to take the action that I have announced today.

Mr. Michael Lord: I acknowledge the reasonableness of my right hon. and learned Friend's answers. Nevertheless, I ask him to consider that the general public are still extremely confused. I have seen reports that suggest that one can eat lamb every day of the year without getting any more radiation than one gets from a visit to the dentist. I am not sure whether that is a recommendation to carry on eating lamb or one to stop going to the dentist. Will my right hon. and learned Friend accept this at least? Unless we can establish a scientifically correct yardstick that is more easily understood by the general public, we shall have more problems both with the Chernobyl-type incidents and, more particularly, with our continued nuclear programme.

Mr. Rifkind: My hon. Friend makes a reasonable point. The difficulty under which we all labour is that certain figures have been adopted for international purposes, but many experts think that these figures are far too low and that higher figures would be consistent with the safety of the public. Nevertheless, these are the present figures available for the international community. Therefore, it is right and proper that, if these are the figures that it is recommended that one should consider, it is only reasonable to respond in that way.

Dr. Norman A. Godman: Is the Secretary of State satisfied with the sampling methods employed in this monitoring process? Has a similar monitoring process been carried out on recent imports of fish from north-east Atlantic countries?

Mr. Rifkind: I cannot speak in detail about the products of other countries, but I have no reason to doubt the reliability of the sampling that has been carried out in Scotland.

Mr. Richard Alexander: In conjunction with my right hon. Friend the Minister of Agriculture, Fisheries and Food, will my right hon. and learned Friend reconsider restricting compensation to cases of severe loss? If someone suffers loss as a result of a Government decision, for whatever reason, is he not entitled to compensation? What action are my right hon. and learned Friend and the Government taking to get this loss back from the perpetrators of the incident, the Soviet Union?

Mr. Rifkind: My hon. Friend will appreciate the difficulties that would be inherent in any such attempt, but compensation is a delicate and difficult problem. We hope that, for the vast majority of farmers, the lambs in question will in due course be safe and will go to market, so any loss sustained will be minimal, if it exists at all. This will be more apparent as the days go by.

Mr. Gavin Strang: When the Secretary of State uses phrases such as "no risk to the public", will he acknowledge that any increase in the exposure of the population to radiation leads to an increase in radiation-linked diseases, albeit a small increase? In that context, will the Secretary of State give us some further information as to the level at which the radio-caesium content of the lambs will have to fall before the meat is deemed suitable for human consumption? Can we be assured that it will be below half the level of 1,000 bq/kg?

Mr. Rifkind: The internationally recommended level is 1,000 bq/kg. The highest figure in Scotland of which we are so far aware is only 1,200 bq/kg. There is a biological half-life for caesium of 20 to 30 days. Therefore, it is reasonable to assume that, in the vast majority of cases, in those lambs that at the moment have contamination above the level of 1,000, the level will fall well below the internationally recommended level during the period of this order.

Mr. Keith Raffan: Will the announcement that my right hon. and learned Friend has made affect the movement of sheep from unrestricted areas to abattoirs within the restricted areas that he has designated?

Mr. Rifkind: If it were desired to move sheep from unrestricted areas to abattoirs in restricted areas, that would be permissible, as long as the sheep did not stop in transit. If they stopped for any length of time, they would become subject to the requirements of the order.

Ms. Clare Short: I am not trying to spread panic, but I find the situation increasingly frightening. I do not think that the Government's position adds up. If it is necessary to stop selling lamb now, it is not good enough for the Secretary of State to say that there is no danger. He would not be making this statement if there were no danger. If this is necessary now, what about the vegetables, crops and milk that have already been consumed? I am not satisfied. The Government are not protecting the public properly. I think that I am typical of many people in finding, in the Welsh ban on sales and now this, great cause for fear and a great sense that the Government are not protecting our interests properly.

Mr. Rifkind: I suspect that the hon. Lady would not be capable of being satisfied by any announcement that the Government made on this issue. All the lamb in the shops at present is absolutely safe, and on all the information that we have, the lambs that are at the slaughter houses at the moment are safe. The reason for the order is that a number of lambs have been identified —for the most part young lambs, and several weeks will elapse before they are ready to go to market — and it is therefore sensible to continue to monitor in those areas where findings have been taken that are above the internationally recommended level. However, the level to which I have referred is not a level above which it is unsafe to eat lamb.


The level for that is much, much higher. In fact, 1,000 bq/kg is the level at which Governments are recommended to consider taking action. In other words, that is quite different from the implications of the hon. Lady's remarks.

Mr. James Wallace: The Secretary of State said that the Department of Agriculture and Fisheries for Scotland was not monitoring young lambs at the time that the Ministry of Agriculture, Fisheries and Food was doing so. Why was that?

Mr. Rifkind: We were concentrating upon those lambs that were at the slaughterhouse, because lambs at the slaughterhouse were to go immediately to the shops and to be eaten by the public. That seemed to us to be a clear priority, and that view was taken throughout the United Kingdom. There was additional monitoring in England and Wales of young lambs some weeks before they were due to go to the slaughterhouse. In the light of those findings, it seemed reasonable that we should take similar samplings.

Mr. Home Robertson: The Secretary of State said that he received the results of these tests only yesterday. If he really wants to allay public fear, will he answer my question? What information did he have during the month of May about the concentration of caesium contamination on pasture, or in animals, or elsewhere? There are many more questions that need to be answered. In the presence of the Leader of the House, I suggest to the Secretary of State for Scotland that there is an urgent need for a debate in this House on the whole issue.

Mr. Rifkind: We are perfectly happy to make available to the public all the results of the sampling that we have done. It is precisely that decision that I have announced today and that we have put into practice during the last few weeks. This is the first time that we have had figures relating to young lambs that imply levels above 1,000 bq/kg. Therefore, the House and the country would expect us to take action of the kind that I have described, and that is what we have done.

Later—

Mrs. Ann Clwyd: On a point of order, Mr. Speaker. As you so clearly ruled, in reference to the statement on Scotland, that it was Scottish business, are you in a position to tell us whether a similar statement will be made on Wales? Are we to have a statement from the Secretary of State for Wales? Many hon. Members would like to put questions to him. The concern in Wales is just as extreme as it is in Scotland. I believe that a statement should be made in this House along exactly the same lines.

Mr. Speaker: I do not know whether the hon. Lady was present on Friday, but Wales was covered then.

Mrs. Clwyd: But not by the Secretary of State for Wales.

Mr. Alex Carlile: Further to that point of order, Mr. Speaker. The Secretary of State for Wales is the Agriculture Minister for Wales, not the Minister of Agriculture, Fisheries and Food. The Minister of Agriculture for England has made a statement and the Secretary of State for Scotland has made a statement, but all that we have seen the Secretary of State for Wales do is slink in and out of the House with a guilty expression whenever somebody else wants to make a statement.
You have told the House frequently that you protect the position of Back-Benchers—as you do, Sir. We ask you to ensure that the Secretary of State for Wales comes to the House and makes a statement on the caesium levels in sheep in Wales. Half of Wales is now affected by restrictions, including much of my constituency. Welsh Back-Benchers should be given the opportunity to question the Secretary of State on this matter.

Sir Geoffrey Finsberg: Further to that point of order, Mr. Speaker. Is it not correct that all Secretaries of State are interchangeable and that the statement could have been made by the Secretary of State for Employment?

Mr. Speaker: It is not for me to call upon the Secretary of State for Wales to make a statement. I do not possess that authority. A number of Welsh Members were called on Friday when the Minister of Agriculture, Fisheries and Food made his original statement.

Social Security Bill

Hon. Members: On a point of order——

Mr. Speaker: Order. I shall take first the point of order of the hon. Member for Oldham, West (Mr. Meacher).

Mr. Michael Meacher: On a point of order, Mr. Speaker. I rise to ask you to use your good offices to request the Secretary of State for Social Services to make a statement. Following the Government's humiliating defeats on the Social Security Bill yesterday in another place, his proposals for the so-called reform of social security have now degenerated into a ragbag medley of disconnected cuts without any logic or structure. Since the package is now in total disarray, and since in every single policy area his original proposals have now been mauled out of all recognition, the only decent thing for him to do would be to withdraw the whole package. But even if he does not do so, since there is no electoral mandate for this package, since the proposals were almost universally condemned in the consultation exercise and since they have now been decisively thrown out in another place, it would he a constitutional affront to use the whipped majority in this House to reverse these votes. We want an unequivocal assurance to that effect.
The Bill represents the most unpopular set of proposals in this area for 50 years. On every test of public approval, they have failed. The Secretary of State must now recognise that fact and withdraw his package.

Mr. Speaker: I know about the changes that have been made in the other place, but there will be an opportunity here to consider Lords amendments. Whether or not a statement is made is not a matter for me, but no doubt we shall deal with the matter when the Bill comes back here.

Later—

Mr. Bill Michie: On a point of order, Mr. Speaker. I refer to your answer to my hon. Friend the Member for Oldham, West on the Social Security Bill.
May I, through you, ask the Leader of the House, who is present, when a statement is likely to be made rather than that we should allow the House of Lords to do further damage to the Bill, which has already lost credibility?

Mr. Speaker: I did not say that there will be a statement. That is not a matter for me. I said that the Bill will undoubtedly come back here for consideration of Lords amendments.

Mr. Ernie Ross: Further to the point of order raised by my hon. Friend the Member for Oldham, West (Mr. Meacher), Mr. Speaker. It is very important that the Secretary of State for Social Services should say whether he intends to proceed in another place with the Bill. It would be a waste of the time of the House if the Bill wee to be brought back here, where it s likely to suffer further defeats.

Mr. Terry Lewis: rose——

Mr. Speaker: Is it the same point of order?

Mr. Lewis: Yes, Sir.

Several Hon. Members: rose——

Mr. Speaker: Order. We have an important debate today. I shall take one more point of order, if it is on the same point.

Mr. Lewis: Further to the same point of order, Mr. Speaker. Not only were two amendments to the Social Security Bill severely defeated in the other place last evening, but a few others very narrowly scraped through. A coach and horses has been driven through the whole measure and it is now in complete disarray. Surely it is necessary that a statement should be made either today of tomorrow, but preferably today, to satisfy Back Benchers who have worked very hard to explode the very matters that the other place has exploded.

Mr. Speaker: I am sure that those comments will have been heard, but they are not matters for me.

Famine Relief in Africa

Mr. Archy Kirkwood: I beg to move,
That leave be given to bring in a Bill to place a duty on the Overseas Development Administration to publish an annual Report to Parliament on famine relief in Africa to include individual reports on each project in Africa financed directly or indirectly from public funds; to establish a timetable during which overall official United Nations aid targets for overseas aid may be reached; to establish a timetable during which the proportion of aid spent on development of subsistence agriculture in the poorest countries would constitute 50 per cent. of the total aid budget; to encourage long term development of African agriculture; and for connected purposes.
Hon. Members will have noticed that only today the United Nations has again renewed its warnings about the drought in six African countries. Of course, droughts are endemic to Africa. They are predictable events that build up over a period of time. They continue, and they will almost certainly get worse in future. That represents only one of many contributory factors to the difficulties experienced in Africa today.
The stark fact is that Africa's ability to feed itself has been steadily diminishing for more than 20 years. Food self-sufficiency decreased by about 12 per cent. from 1960 to 1980. Food imports increased by about 9 per cent. over the same period. [HON. MEMBERS: "Why?"] Conservative Members, from a sedentary position, are asking, sotto voce, "Why?". One of the reasons is the destruction of the environment which has led to increased incidence of drought and desertification. There has been a change from food production to cash crop production. The cash crops are purchased on the world commodity market, sometimes at extremely low and unpredictable rates.
There has been an appropriation of the best agricultural land by settlers, plantation owners and multinational companies. I submit that one of the other main reasons is the incidence—it is an uncomfortable fact—of war and civil strife which has destroyed crops and disrupted agriculture. Currently, some 40 per cent. of Government resources in Africa are spent on arms. Against that background, it is true to say that fund raising is dealing only with symptoms. The real causes of the problems are political in nature, and political action is required to deal with them.
My Bill requests the Overseas Development Administration to produce an annual review and to include in that review an individual project report. That provision is important, because the impact of the deployment of British taxpayers' money must, in my view, be directed primarily to the alleviation of poverty. Hon. Members will have noted that the World Bank report "Poverty and Hunger", published in March this year, found that the basic cause of hunger or food insecurity was poverty or lack of purchasing power. I quote two sentences of the report:
Hunger persists even in countries that have reached self-sufficiency in food. Food insecurity cannot be eliminated without alleviating the poverty of countries and people.
It is not always clear how effective the United Kingdom's contribution is in combating that poverty and famine directly at source. An annual review and project report would make it more apparent to the press, the public, the charities and agencies involved, and everyone outside the Overseas Development Administration.
The Bill contains an important provision that a timetable be set during which overall UN aid targets for overseas aid may be reached. Hon. Members will know that most countries in the West have made steady progress towards the official UN target of 0·7 per cent. of gross national product devoted to aid. Scandinavia and the Netherlands have passed that target. Successive Governments have accepted the target without having set a timetable for its achievement. In 1979, the Labour Administration reached a figure of 0·52 per cent. of GNP. That figure has subsequently fallen to a disgraceful 0·33 per cent., making the present Government's so-called commitment somewhat suspect.
I submit—I am sure that this view is held across the Floor of the House— that it must be possible to reach the UN target. Even if it takes up to four years to do so, we should set out in that direction forthwith.
If one looks at the way the three broad measures used to record United Kingdom aid have been changing, one sees that all have fallen in real terms since 1979. Using figures compiled for the years 1979 to 1984, public expenditure on aid has fallen by 19 per cent. The aid programme that is technically administered by the ODA has fallen by 21 per cent. Official development assistance, which excludes floors and market terms—what is known as concessional aid—has fallen by some 33 per cent.
The Bill also sets a timetable during which the proportion of aid spent in the development of subsistence agriculture in the poorest countries constitutes some 50 per cent. of the total aid budget. It is notable that, in 1984, only 15 per cent. of United Kingdom bilateral aid was allocated to agriculture and related economic sectors—renewable natural resources. By comparison, mining and energy took some 55 per cent. of United Kingdom bilateral aid.
Infrastructure is obviously important, especially in health, education and communications. By and large, the infrastructure developed by United Kingdom aid at the moment does not primarily assist the work of people producing food on the land.
There have been changes and reductions in aid for research and development in United Kingdom institutes and in the renewable natural resources sector. At the same time, there has been a significant increase in the proportion of the aid budget devoted to aid and trade. I submit that funds under that heading should be more appropriately found from the trade and industry budget.
Last year, the report of the Select Committee on Foreign Affairs entitled "Famine in Africa" argued that
to help in the prevention of recurrence of the present crisis, assistance by the donor community is required in various ways for the food producing sector"—
which the Committee defines as
principally smallholder, agricultural and horticultural production".
Last year, the all-party parliamentary group on overseas development showed that there was a considerable mismatch between the robust policy statements in favour of aiding the renewable natural resources sector in Africa and the relatively modest level of financial allocations made available.
On 1 June this year, the United Nations special session on Africa completed a review of the initiative of African countries. The British Foreign Secretary, speaking for the United Kingdom in the plenary session, said that, important as Sports Aid had been, it was now the turn of


Governments to act. The House knows that the Organisation of African Unity has adopted a far-reaching and fundamental programme called Africa's priority programme for economic recovery. The organisation adopted that in 1985 and set out a financial target of $128 billion which it needed in the four years from 1986 to 1990. Sixty four per cent. of the funding for that programme is to be found from within African domestic budgets. The rest is to be found from external resources. The United Nations special session did not formally endorse or adopt the OAU report, but it reaffirmed a commitment to provide resources to support and complement the efforts of the African countries.
It is now the season when Government Departments are preparing bids to the Treasury for expenditure targets to be announced in the autumn statements. If the House permits me to introduce the Bill — the Bill has all-party support—it will be a strong signal that we all accept that long-term development in African agriculture must be afforded a higher budgetary priority if we are to have any real and long-term hope of banishing poverty and famine and its horrendous cost in human life and misery.

Question put and agreed to.

Bill ordered to be brought in by Mr. Archy Kirkwood, Mr. Jim Lester, Mr. Mark Fisher, Mr. John Cartwright, Mr. Donald Stewart, Mr. David Alton, Mr. A. J. Beith and Mr. Geraint Howells.

FAMINE RELIEF IN AFRICA

Mr. Archy Kirkwood accordingly presented a Bill to place a duty on the Overseas Development Administration to publish an annual Report to Parliament on famine relief in Africa to include individual reports on each project in Africa financed directly or indirectly from public funds; to establish a timetable during which overall official United Nations aid targets for overseas aid may be reached; to establish a timetable during which the proportion of aid spent on development of subsistence agriculture in the poorest countries would constitute 50 per cent. of the total aid budget; to encourage long term development of African agriculture; and for connected purposes: And the same was read the First time; and ordered to be read a Second time upon Friday 4 July and to be printed. [Bill 187.]

ESTIMATES DAY

[2ND ALLOTTED DAY]

ESTIMATES 1986–87

Class VIII, vote 3, Administration.

Employment

[Relevant documents: First, second and third reports of the Employment Committee, House of Commons Papers 199 (1985–86), 265 (1985–86) and 435 (1985–86).]

Motion made, and Question proposed,
That a further sum, not exceeding £27,735.000, be granted to Her Majesty out of the Consolidated Fund to defray the charges which will come in course of payment during the year ending on 31st March 1987 for expenditure by the Department of Employment on the administration of benefit services and on central and miscellaneous services.—[Mr. Kenneth Clarke.]

Mr. Ron Leighton: I commend to the House the two reports of the Select Committee on Employment, on special employment measures and the corporate plan of the Manpower Services Commission. The MSC has a budget of some £3 billion and the House should give it more detailed attention. We compliment the MSC upon the comprehensiveness of its corporate plan, which sets something of a standard to other public bodies in that regard. We were impressed by the enthusiasm of the MSC staff for the necessary work they do. I want to concentrate on our reports on special employment measures. The opening words of our first report were:
We seek to attack a vicious paradox. Admitted needs in both the public and private sectors have increased, while the stock of unused resources, both human and material, has increased likewise. Why not bring the unmet needs and unused resources together more quickly? We believe that unemployment is increasingly becoming the main social, moral and economic problem facing the country.
The cost of the dole queue to the Exchequer is about £20 billion. That must be bad economics. If those people were at work, they would produce some £35 billion worth of wealth. It is a failure of imagination to allow that to continue. The Committee's report stated:
The costs of unemployment, including long-term unemployment, are not to be measured only in terms of benefit paid, taxes forgone and output lost. The associated increase of family breakdown, drug abuse, sickness, suicide and crime have a high economic and social cost.

Mr. Eric Forth: Will the hon. Gentleman give way?

Mr. Leighton: I hope that the hon. Gentleman will forgive me for not giving way.
Let the House consider the nature and scale of this tragedy and what has happened. In the year to October 1978 unemployment fell by 91,700. In the year to October 1979 it fell by a further 62,100. Then there was a change of Government and, with it, a change of policy. I do not want to be too partisan but perhaps it is as well to remind ourselves that the Conservative election manifesto in 1979 promised what was termed "more genuine new jobs". On 15 May 1979, the Gracious Speech stated:
My Government will give priority in economic policy … and create a climate in which commerce and industry can flourish"—
and lay the basis for


increased employment in all parts of the United Kingdom." —[0fficial Report, 15 May 1979; Vol. 967, c. 48.]
That was the promise and the prospectus. What happened? I want to give the facts. Anyone can have opinions; it is the facts that count.
By the next year, 1980, unemployment had rocketed by 670,200. By the following year, 1981, it had increased disastrously, by no less than 903,400—almost 1 million in one year. In contrast to the 1979 promise, unemployment has continued to increase every year since.
The Select Committee and, I am sure, the House are concerned about the dramatic increases, within those totals, of the numbers of the long-term unemployed—now more than 40 per cent. of the jobless, numbering 1 million. If we included those taken out by the Budget changes of 1983 for a real comparison, we get a true figure of some 1,430,000 unemployed for more than a year, compared with only a third of a million in 1979. There are now more long-term unemployed than the total out of work in 1979. Well over 500,000 have been out of work for more than three years — many for four or five years. This reflects the marked increase in the numbers of people thrown out of work in 1980, 1981 and 1982 and denied work ever since.
I put it to the House that the Government have a special responsibility to those of our people, because they are the victims of the Government's policies. Many of the younger generation have never known what it is to have a job. They have been brought up, and are now marrying and starting families, in an out-of-work society. It is impossible to overestimate the damage it is doing to our society and its cohesion. We are fashioning a time bomb for the future. It is not an adequate response to equip the police with CS gas and plastic bullets.
This is not just an economic problem; it is a moral problem. Recently, the Secretary of State for Employment, Lord Young, made a speech suggesting that 87 per cent. of our people had never had it so good. Does that mean that the millions of unemployed do not matter? That speech does not stand up to close scrutiny because the lower paid have seen their incomes decline in absolute terms. Those in receipt of state benefits, such as pensioners, have not shared in the increased standards of living.
But to the extent that that statement is true, if nationhood and common citizenship mean anything, do not those who have done well out of the past seven years owe a duty to those who have not—to those who have been shut out and allowed to rot on the dole? Are we to widen the gulfs and divisions in our country even more by spending what resources we have on tax cuts for the better off?
We all lose and are impoverished by mass unemployment. There is the monumental waste of £20 billion every year to finance the dole queue. There is the lost output. We all know of the things that our constituents lack, yet idle people are not allowed to produce them. Much of the country is crumbling to bits and becoming a slum and, in areas where almost half the population are idle, we see dramatic increases in crime and disturbances in our cities. We all lose by mass unemployment, in the quality of society and of our own lives.

Mr. Forth: rose——

Mr. Leighton: Ought the Government do something about it? Yes. Can they do something about it? Yes, of course. It would be a betrayal, a form of treason to democratic politics, to say that we can do nothing. If hon. Members say that we can do nothing, we should not be here. Yet the Government have virtually given up. We know that because their assumptions are fed into public expenditure plans which show an assumption of, and provision for, mass unemployment as far ahead as can be seen.
The Government's main policy is seeking to lower wages and, fancifully, to price people into jobs. Even here they have succeeded only in reducing the wages of the lower paid, yet their unemployment is already higher, and is increasing—disproving the notion that unemployment is caused by high wages. For the rest, there is just chatter about deregulation, jargon about improving the functioning of the labour market and the three Trade Union Acts —all aimed at lower wages.

Mr. Peter Thurnham: rose——

Mr. Leighton: However, it must be noted that, for the most part, real wages are not directly under Government control, nor are the long-term unemployed now any longer part of the labour market. As someone recently said, they might as well be in Australia for the effect they have on the level of wages. This failure has led the Government to a deafeatist, almost passive acceptance of continuing mass unemployment. We cannot endure this indefinitely, so what is to be done?
Even with the Government's tight overall fiscal-monetary stance, the Chancellor said in the 1985 Red Book that there was a £9·5 billion "fiscal adjustment" from 1986–87 to 1988–89. Therefore, that £9·5 billion of tax cuts or public expenditure increases would be consistent with the Government's public sector borrowing requirement objectives. Here we all have to make a choice of objectives. Here we all have to decide on what we should like this money to be spent. Surely this scope should be used, as far as possible, to create jobs quickly. That should be the priority. The Select Committee took evidence on the best and most cost-effective ways of doing that.
Of course, other things being equal, we should all like to see tax cuts. However, if we are interested in jobs, the evidence shows that tax cuts are the least effective, and most expensive, way of creating jobs, costing some £50,000 net for each person removed from the unemployment count. Some people would allege that income tax cuts unleash a surge of productive enterprise and incentives to work effort. The best that can be said for that is that it is completely unproven. The 1979 Budget, introduced by the former Chancellor, the present Foreign and Commonwealth Secretary, was based on that concept. It had the opposite effect and preceded a surge of unemployment.
Much of the proceeds of tax cuts goes into savings or is spent on imports, not domestic employment. It might be more honest to admit that income tax cuts are a straightforward bribe for electoral reasons than to pretend that they are for the good of the economy. Better and cheaper for job creation, although still relatively expensive, are increases in public expenditure, notably in public investment. They are considerably more cost-effective than income tax reductions. Here we should note that the direct and indirect job content of each unit of


public expenditure differs considerably programme by programme and according to whether it is current or capital expenditure. This would have to be taken into account when designing the mix to create employment.
The third method of job creation——

Mr. Nigel Forman: I am sorry to interrupt the hon. Gentleman in the flow of his long speech, but does he not accept that any variable analysis of the impact of different forms of fiscal adjustment upon employment is bound to be suspect? About the only confident statement that one can make is that tax cuts may have a greater or lesser effect on unemployment than the other things he is discussing, such as public expenditure or national insurance. It is clear that it does not have a quick effect. Is it not a question of time scale?

Mr. Leighton: The hon. Gentleman is known in the House for his attention to these matters. He is right that the estimate cannot be exact. What he says about the speed at which the measures can be introduced is also right.
We are not suggesting that these are the main measures for the future of the whole economy. They are measures to be taken alongside an orthodox expansion of the economy. Whatever mix of measures that we have, the Select Committee proposes selective employment measures because they are targeted and quick acting, with an effect in the short term within the next two or three years. That is why we recommend them.
Therefore, I come to the third method — special employment measures. The evidence here is striking and very clear. It shows that they are far and away the most effective measures of all. They boost employment or cut unemployment far more than any other use of money.
The Government already have a range of special employment measures such as the community programme, the enterprise allowance scheme and the job release scheme. If we include the youth training scheme, although it is not strictly speaking a special employment measure, more than 600,000 people take part, taking over half a million out of the unemployment count. That is not at £50,000 a head, as with tax cuts, but at about £2,000 a head. That is spectacularly good value.
What the country needs now—I take the point of the hon. Member for Carshalton and Wallington (Mr. Forman) in relation to the short term—is a new deal. Alongside an orthodox revival of the economy we need, especially in the short term, a major expansion and upgrading of special employment measures to take up and reduce unemployment.
Of course, there are some criticisms of the measures. Some spending is on dead weight, that is, in financing jobs that would have existed anyway. Also there is displacement, displacing employment or output elsewhere. There is nothing new or unique in that. For example, regional development grants often go to firms that would have made the investment regardless of the availability of grants. There is already heavy dead weight on some of the Government's schemes. On the young workers scheme, which has been revamped into the new workers scheme, the dead weight is well over 75 per cent.
On the enterprise allowance scheme, of which the Government are so proud, the dead weight is about 50 per cent. But, even allowing for the dead weight and displacement, the expenditure on special employment

measures is some 20 times more effective than tax cuts. It is certainly far quicker in removing people from unemployment.
On the inflation criterion, special employment measures are superior to other uses of money because they are targeted towards individuals, firms and areas where labour is in excess supply, and so they do not lead to inflation. Spending on the long-term unemployed is not inflationary. It is an investment in their future employability.
At present, 0·6 million people are on special employment measures. What is the optimum number? What is the optimum number with unemployment at over 4 million? Why is the figure 0·6 million rather than, say, 1·6 million? We had better realise that the measures will be a permanent feature of the labour market as far ahead as we can see, so let there be longer-term planning and evaluation.
Here I come to the details of our proposals. We concentrated on the long-term unemployed as a priority category. For them, privation and hardship is greatest. They are discriminated against as the only long-term claimants who cannot claim long-term benefit, however many years they have been out of work.
After a family has been without wages for a year or more, clothing, footwear and household goods wear out and cannot be replaced. Their children suffer, and in turn their life chances are affected. The longer that someone is without a job, the less likely he or she is to get a job. Unemployment is not an orderly queue, where those who have waited the longest come off first. The reverse is true. Successful applicants tend to be those who have recently joined the queue. The great advantage of special employment measures is that they can be targeted at specific groups.
Our original proposals recommended that, over three years, a job guarantee should be offered to all long-term unemployed who wanted one We wanted the new special measures to create additional jobs at the lowest feasible cost to the Exchequer. That would lead to regular jobs with regular employers, paying the rate for the job for a full week if required. We felt that 750,000 extra places, in addition to the 230,000 on the community programme at the peak of the scheme, would be sufficient to provide the guarantee. Clearly, it would not be possible to provide these jobs at once. We envisaged a build-up of the scheme over three years, with pilot schemes to test out the ideas in practice and learn from them. Where would the extra jobs be found? The first area was an urban rehabilitation and building improvement programme. Despite the enormous backlog in maintenance work, the construction industry is employing 500,000 fewer workers than a decade ago. We envisage 300,000 extra jobs at a net cost of £1·5 billion when the scheme is in full operation.
The second area is in health and personal social services. Both are highly labour-intensive. We suggested that 50,000 people should be employed in the personal social services and 50,000 people in the National Health Service.

Mr. Thurnham: I apologise to the hon. Gentleman for arriving a few moments after he started his speech. Could the hon. Gentleman say whether trade unions have suggested they would be able to support the initiative from


the Select Committee? I have not heard of any response from the Trades Union Congress on the suggestions that the Committee has put forward.

Mr. Leighton: I have no knowledge of the trade union view of the schemes. Perhaps, if I may be allowed to call him my hon. Friend, the hon. Member for Bolton, North-East (Mr. Thurnham) and I might together seek evidence on this from the TUC.
I am putting this forward not as the view of the TUC, but as the view of the Select Committee. Indeed, I offer these views to the Government and the country, and that includes the TUC. I am as prepared to argue this case with the TUC as I am with anyone.

Mr. John Evans: Would my hon. Friend accept from me, as someone who regularly meets senior members of the trade union movement, including members of the TUC general council, that they would accept any measures that would help to get the long-term unemployed back to work? The problem is in trying to get the Government to accept the measures.

Mr. Leighton: I hoped that that would be the view of the TUC. I certainly thought it might be. We need sensible and feasible ideas to tackle and remedy the problem of long-term unemployment. That is why we are putting them forward.
I hope that the House will come up with sensible, reasonable and practicable ideas and I am certain that we could discuss them with the TUC. I have no reason to suppose that the TUC would be anything other than co-operative in any measure that would increase employment.
I understand that it is public policy to move from institutional care to care in the community. We need more carers, and that is the area of our second proposal. The net cost would be about £0·4 billion.
The third area of our proposals involves a wage subsidy of £40 a week, which is the average benefit that a long-term unemployed person may expect to receive, and would be paid to the employers in the private sector who took on additional long-term unemployed people. Allowing for the maximum possible dead weight, we estimate that some 350,000 jobs could be created by that means at a cost of £1·4 billion. At the end of a three-year period, that would give us the additional jobs needed to constitute the guarantee to the long-term unemployed, at an eventual cost of £3·3 billion.
We studied the figures carefully, and we had our calculations double checked by the London Business School. Such a programme would transform the situation in this country. Everyone would know that a year would be the maximum period that he was idle and out of work. It would lift morale, and restore hope to our people. The report received a very good response in the country and in the press. The Government's reply was a long time in gestation. When it came, they did not fall over themselves in their eagerness to spend £3·3 billion in that way.
The Government claimed that we had underestimated the cost, which they said would be £4·3 billion at its peak —which is £1 billion more than our estimate. They also thought that it would produce fewer jobs. We do not accept the arithmetic of their calculations, and we would be pleased to discuss that. But even on their figures, we say that the proposal is well worth while and should be

adopted. The main argument against seemed to be the cost, which the Government's reply said was "formidable". In the fifth paragraph, the Government said:
The cost of attempting to implement the Committee's proposal would be prohibitive".
In their very last paragraph, the Government said of the £3·3 billion cost:
Additional spending on this scale would pre-empt the scope for tax reductions.
So there is the choice. It is a question of priorities, and of what value one puts on dealing with unemployment. When considering the Government's reply, we were somewhat heartened that, although the Government did not agree with our figures, we were not all that far apart. We said £3·3 billion: they said £4·3 billion. At least we are in the same parish. We take the Government's reply as being in no way a rejection of the Committee's view that the long-term unemployed are a priority category.
We did not leave things there. The debate must continue. Consequently we have come back with a scaled-down version of our programme, and have suggested that our proposal for the job guarantee should be offered to the over 500,000 people who have been out of work for three years or more, at a cost of £1 billion, and that pilot projects should be used to test the feasibility of our original, more ambitious proposals. This much more modest proposal that we now put forward would involve less than one third of the original cost. We offer it in a constructive and helpful spirit. It is something that we can afford. The House will remember the billions found to defeat the miners' strike, and the billions spent in the Falklands. We can certainly spend £1 billion on fighting unemployment among our own people if the will and the desire are there. If we do not embark on that programme, or on one of a similar nature, we shall write off those fellow citizens.
Despite being told of the new jobs that have been created since 1983, the number of long-term unemployed has grown dramatically during that period, and the duration of their unemployment has likewise grown. Any general economic growth would help only the short-term jobless. Unless there are specific and targeted measures, those people will never work again. That would be unforgivable and a betrayal. If the Government want to help, it is perfectly possible for them to do so. We have pointed the way.
I am pleased to see that the Paymaster General is listening intently, although I am now drawing my speech to an end. I imagine that he will refer to the extra places on the community programme. We have included that in our calculations. I imagine that he will also refer to the restart programme as being the Government's way of tackling the problem. I should make it clear that the Select Committee fully supports the restart programme. However, it would be futile to suggest that it is a solution to the problem. As the Paymaster General knows very well, it has nothing to do with job creation. It does not create one single new job. The most that it can do is to seek to ensure that the long-term unemployed get a better share of the existing vacancies. But what if there are no vacancies, or too few? The six-month restart pilot projects started on 6 January. My researches show that on 9 May, five months later and five sixths of the way through the period of the project, 3,919 letters went out in Dundee, and, after five months, just 11 people got jobs.

Mr. John Prescott: I think that my hon. Friend must have heard the exchanges during


Question Time, which showed that the Government are concerned not about how many people obtain jobs, but about how many are offered jobs. Presumably, many people are offered the same job so that the Government can say that so many offers have been made, and do not have to state the number of real jobs available.

Mr. Leighton: It is not quite like that. People are offered a menu of opportunities. One offer may be to go to a job club, another may be to train, and yet another may be to join the community programme. There is no question of 90 per cent. being offered jobs. The Select Committee will try to monitor the restart programme, and lay the facts before the House. Indeed, such monitoring is a justification of the whole Select Committee system.
It could also be said that the task of the restart programme is not just to put people into jobs. I have travelled round the country with the MSC, and it is said that the main purpose is not to offer people jobs but to remotivate them, to train them, and so on. The Paymaster General must be careful about the language that he uses. The restart programme will not solve the problem. It will not create a single new job. It is not in the business of job creation.
Once I have given a few more figures for the restart programme, I shall outline how our proposals could help it. After all, we are in favour of the restart programme. In Billingham 941 letters were sent out, yet by 9 May only four people had got jobs. In Preston, 3,130 letters went out and nine people obtained jobs. In Huddersfield, 2,544 letters were sent out, but by 9 May—five months after the beginning of the six-month pilot project—15 people had been placed in jobs. In Stoke, 4,140 letters were sent out, and 23 people obtained jobs. In Port Talbot, 2,615 letters were sent out, and 53 people found jobs. In Plymouth, 2,537 letters were sent out, and seven obtained jobs. In Crawley — this looks as though it is the best result, and I know Crawley quite well—643 letters were sent out, and 53 were placed in jobs by 9 May. Lastly, in Ealing, 2,260 letters were sent out, and 38 were placed in jobs.
The pilot projects have another month to go. We shall then get a final assessment, and the effect of all this will continue. To use language such as the Paymaster General used at Question Time today misleads my hon. Friends into thinking 90 per cent. when it is a fraction of 1 per cent. ——

The Paymaster General and Minister for Employment (Mr. Kenneth Clarke): I am sure that the hon. Gentleman would not wish unintentionally to mislead the House in the use that he makes of the figures. He is talking about the number placed directly, on coming to interviews, in available jobs. He knows that he is leaving out all the figures for those placed in jobs on the community programme, all the figures of those referred to job clubs, where about two thirds will get jobs, and all those who will benefit from the restart courses, which will undoubtedly have an effect on people's ability to go into jobs. He is making a narrow and most misleading use of all the information that we are producing about the pilot schemes just as, a few moments ago, he completely misrepresented the Government's response to the report of the Select Committee by suggesting that we turned it down on cost alone. He knows perfectly well that it was the impracticability of what was proposed that led us reluctantly to reject it.

Mr. Leighton: I am pleased that I have flushed out the Paymaster General and got him to come and account for himself. Now we are beginning to get down to some of the nitty-gritty. It is frustrating at Question Time, when the Paymaster General comes back with his strange language giving everybody the impression that 90 per cent. are satisfied and happy. When we start probing, which is what a Select Committee can do—we can ask not just one question but 12 questions, and we can visit places and get to the facts—we find a different situation. Let us get to an area of agreement here.

Mr. Clarke: The hon. Gentleman, when he remembered that he was Chairman of the Select Committee, conceded that the report of the Select Committee was in favour of restart. He then launched into a great attack upon it. We have used consistent language throughout to the effect that 90 per cent. of those interviewed are made some sort of offer. The confusion is caused by the completely inaccurate quotation of what we are meant to have said by various right hon. and hon. Members of the Opposition.

Mr. Leighton: The right hon. and learned Gentleman must learn to relax and not get too excited about this. There is no need to worry because there is a lot of common ground here. We are in favour of the restart programme, make no mistake about that. We are putting forward proposals to make the restart programme more effective. I say again—I will give way if the Paymaster General thinks that I have this wrong — that the restart programme is not an exercise in job creation. It does not create one new job. It seeks to ensure that the long-term unemployed get a better share of the existing vacancies.

Mr. Clarke: As the hon. Gentleman knows, the community programme is a job creation programme, which is why we are doubling it at huge expense. It will provide jobs for over 300,000 in a year. When giving his figures, the hon. Gentleman leaves out all the community programme jobs, although earlier in his speech he was saying how cost effective the job creation measures were and that he supported them.

Mr. Leighton: There is hope for the Paymaster General after all—he is coming along.
The Select Committee recommended two years ago, before the right hon. and learned Gentleman's time, that the community programme should be doubled, and at long last we are managing to drag this out of the Government. I am certain that he will be obliged to carry out many of the ideas that we are putting forward, although he is not jumping at them now. We are the cutting edge—he will come along eventually.
We have included in our figure of 1 million the expansion of the community programme. We want the community programme to be upgraded. Even the Paymaster General has not read the report properly. He; rubbishes a report that he has not read. To constitute the job guarantee of 1 million, we proposed the 750,000, with the other 250,000 to come from the community programme. The Government do not even understand what we propose, yet they jump up and down trying to criticise us. Of course, if the Paymaster General likes to come back, I am always generous in giving way, as hon. Members know. Perhaps he will have a little read, I will continue for a few moments, and I am certain that eventually he will come back on this matter.
I want the community programme to be upgraded. I want the wage, which is a miserly £67, increased so that we can get a better community programme. The Government must pay a little more attention to the documents that we produce and the speeches that we make. It would he nice to have a competent Treasury Front Bench dealing with unemployment.
I repeat for the fourth time, so that the Paymaster General should not misunderstand, that we support the restart programme, and we support and congratulate the dedicated Manpower Services Commission staff operating it. However, as we say in the report,
In fact, the programme is already beginning to reveal a desperate shortage of such jobs".
What the restart programme needs, what it is crying out for, is some jobs for its participants who have been motivated to take them. If their hopes are raised and then dashed, it would be a scandal. I urge the Government to adopt our proposals to work in tandem, to complement and ensure the success of the restart programme, to provide the jobs that the participants of the restart programme, having had their training and their motivation, can take.
I conclude by emphasising that this is a moral, social and economic issue. There must be a response commensurate with the scale of the problem. It is our overwhelming duty to come up with a remedy to this tragedy, which is impoverishing and undermining our whole nation. The Select Committee will strive for it, and I urge the Government to do the same.

Mr. David Howell: I think that the whole House admires the zeal and application with which the Select Committee on Employment looks at the question of job creation and the plight of the long-term unemployed, even if the whole House will not necessarily agree with every nuance of the speech that the Chairman of the Committee has just delivered, giving his own rather personal interpretation of the problem. While there was much in the early part of his speech with which I agreed, it is a pity that he got into a sort of rhythm of accusations about the Government virtually giving up and pushed aside the beginnings of a serious analysis and understanding of this highly emotive and central social problem. About that I was sorry. Nevertheless, I recognise that he feels strongly on these matters, and has done much work upon them.
I hope that, although I am not a member of the Select Committee, I will he forgiven for intruding on a debate and on an issue that obviously affects all of us. In particular, I will concentrate on the Manpower Services Commission's four-year forward corporate plan and report, 1986 to 1990. With that I associate another recently published report that is very germane to the issues under discussion today. That is a survey by the Institute of Manpower Studies which it undertook for the occupations study group on the pattern of employment as the institute sees it evolving over the same period, 1986 to 1990.
The MSC report, some of the comments of the hon. Member for Newham, North-East and the study by the Institute of Manpower Studies all have one central and very obvious message — that the employment and unemployment landscapes have totally changed; they have

altered in their structure and shape and in the problems that they throw up. This is not futurology; it is not something that will happen in 10 years time — it has happened already. We are dealing with a new employment landscape and the MSC report is obviously attuned to that fact as it looks forward to 1990, as does the IMS report.
As the MSC report reminds us, we are now in the fifth year of uninterrupted growth in the United Kingdom economy, yet the prospects for employment are not good. The MSC chairman, Mr. Nicholson, said in the foreword to the report:
Over the planning period unemployment, especially long-term unemployment, is likely to remain at historically high levels, though the rises of recent years are expected to cease.
Elsewhere in the report is the marker that the most sensible and safe planning basis for the long-term unemployed is to assume that the problem will remain at roughly the same level—perhaps not very much worse, but not very much better either.
The IMS tried its hand at rather more precise forecasting and came up with a rather more depressing assessment. It suggests that 640,000 jobs will disappear from the production industries by 1990, with only 520,000 jobs appearing in other industries, notably in the service sector. We must add to that the increase in numbers entering the labour market, which on IMS figures gives an actual rise in the level of unemployment, especially long-term unemployment. As the hon. Member for Newham, North-East said, they are the ones who stay at the hack of the queue.
The beginning of wisdom in addressing this problem is to recognise something that, to be fair to the hon. Member for Newham, North-East, he, his party and the critics of the present position do not fully accept, which is that manufacturing employment—if we define that in the old form—will continue to shrink at a great rate. That is happening all over the world, and in British industry it is happening rather faster than in the past. There is a most basic technological reason for that—manufacturers find that their processes are better organised on very skilled manpower only and on a capital-intensive basis.
As the IMS reminds us, that is a process in which manufacturing is actually divesting itself of large numbers of people, not merely because they are not wanted but because the whole process with which they are associated is now subcontracted outside manufacturing. Therefore, when the pessimist sees that manufacturing employment is shrinking fast, he is actually looking at a process by which the very category of manufacturing is shrinking as more and more of the processes are sub-contracted out. Some of those processes are very close to the main stream of manufacturing production, but include accountancy, transportation, catering, all sorts of services and support to the processes within production. That sub-contracting is to industries and firms that may be classified as services. Thus, the whole pattern is bound to be one of shrinking manufacturing employment; that cannot be stopped. Indeed, if we are to have a flexible, competitive economy in the 1990s, it should not be stopped.
One of our difficulties is that, for emotive, noble but wrong-headed reasons, in the past we have stood in the way of the rapid shrinkage that was required in blue collar and traditional manufacturing jobs, a process that should have meant people becoming reskilled, re-educated and diverted into new activities that probably would not clearly fit the label of manufacturing or services.

Mr. Jim Craigen: What does the right hon. Gentleman say to the pessimists who look for greater buoyancy in the growth of the service sector, but do not see it?

Mr. Howell: That will be dealt with in the remainder of my speech. I accept that the proposition that I have put so far, if left by itself, is gloomy and implies that a great many people will not find jobs in manufacturing. That applies throughout the world, not merely in the United Kingdom. Indeed, I was about to add a little more gloom before coming to a more optimistic line of thought.
It is not the slightest use saying that that process can be stopped by artificially resisting capital-intensive methods. I take strong exception to the line of thought, which has come even from some of my right hon. Friends on the Front Bench, that we should maintain a low-tech or no-tech world to ensure that a great many people continue to do jobs that both they and we know perfectly well can now be done by sophisticated machinery. It is a perfectly human reaction that people should object to being kept in production jobs — perhaps dull and diminishing work — even though it is known perfectly well that machines and capital equipment exist that can do the job far more accurately and quickly.
Keeping people employed by resisting capital-intensive methods and retaining labour-intensive methods is not the right way forward.

Dr. Norman A. Godman: Even the newer industries are not immune to unemployment. For example, the offshore oil industry and its ancillary industries are suffering unemployment because of the very low price of oil. Similarly, in Scotland the electronics and information technology industries have not been immune to unemployment. Therefore, it is not simply the traditional manufacturing industries that have suffered.

Mr. Howell: I take the hon. Gentleman's point. Nor is it true that service industries have shown, are showing or will show growth in employment. A great many of the traditional service industries such as banking and insurance are due for, and are now experiencing, a gigantic diminution in labour needs and a huge increase in automation and computerisation.
So far I have struck a very pessimistic note by reminding the House that the position will become more difficult and that there is little chance of resisting that by maintaining labour-intensive industries or putting up a no-tech flag. That would be as absurd as the red flag that used to go before motor cars to keep them at four miles an hour, and will be about as effective in slowing down the trend in manufacturing world wide to grow without creating jobs—in other words, jobless growth.
I know that my right hon. Friends are greatly concerned about the very sharp wage increases for those in work. Whitehall has got itself into quite a state about high wage increases and rising unit labour costs. I suspect that at least part of that process reflects precisely what I am saying—that manufacturers are no longer interested in expanding employment and taking on new recruits, but want to concentrate on a core of highly skilled workers whom they know well, want to reward generously and are content to allow to work additional overtime and pay high rates. There is evidence that some of the large wage increases are a reflection of that—it is a technological

change rather than an employer waking up one morning with a sudden surge of expansive generosity and deciding to give everyone huge increases for no reason.

Mr. Prescott: This is a serious point. Can the right hon. Member tell the House what kind of large wage increases he is talking about?

Mr. Howell: I am referring to the official statistics, which show that unit labour costs have been rising in engineering and manufacturing generally. A survey measured that at 7·2 per cent. According to the statistics, which I would advise the hon. Member for Kingston-upon-Hull, East (Mr. Prescott) to treat with great caution, in Japan the unit labour costs are zero or falling. That disparity must be worrying my right hon. Friends.

Mr. Prescott: How much money is the right hon. Gentleman talking about? Is he talking about £5,000 or £6,000 a year or the £30,000 or £100,000 being made in the City? What does he consider are the huge wage rates currently being paid?

Mr. Howell: I do not think that the hon. Gentleman can have followed my remarks. I have reflected a view which is heard in Whitehall and which has concerned some of my right hon. Friends. Unit labour cost increases of 8·2 per cent. in a nation which is competitive and which must sell to survive and create new employment are not terribly welcome if unit labour costs are zero or falling in Japan. If the hon. Gentleman finds that point difficult to understand, I am sorry; I should have thought that it was a simple point.
Having struck a note of gloom about the present position of manufacturing employment and long-term employment — a note of gloom that reflects what is stated in the Manpower Services Commission report and the Institute of Manpower Studies report — we trust build on that basis. The policies that are required to meet the social misery, ugliness and fear of being unemployed —and especially of being unemployed for a long tine and being unable to get back to the front of the queue —must relate to the new employment landscape that I have described.
Hon. Members — this view is expressed by hon. Members in all parties—who continue to argue that we can somehow return to the patterns of employment that existed in the 1960s and 1970s and that that can be done by pressing buttons and through deflationary programmes are perpetrating a cruel hoax. We will not return to that employment landscape. We need new policy responses to meet a new employment landscape.
A number of these policies have been developed by my right hon. Friends and many of them are set out in the enormous list of initiatives and programmes listed in the Manpower Services Commission report. There are so many initiatives that it might be a little hard for some people looking for work to find their way through that great variety of different programmes and initiatives, but certain major points can be extracted from the proposals.
The first point is obvious, but the IMS report makes it even more obvious. There will be very little place in the new employment landscape, whether we like it or not, for the unskilled. Everyone who wishes to participate in this new employment pattern in society will have to get a skill. In the rather brutal words of the IMS report, summed up in The Times:
If you are an unskilled worker, get skilled.


That is not a very warm and friendly message but it is filled with realism.
The second point revealed in the proposals is that self-employment, part-time work and work in small businesses will play a much bigger part in the work pattern. Indeed, they are already doing so. Many hon. Members, especially Opposition Members, have referred to part-time employment and have said that part-time employment does not represent "proper jobs." They have asked why we do not return to full-time employment. They have also asked what is wrong with full-time employment and why there must be a growth in part-time employment.
The MSC and IMS studies—which are objective—show that, whether it is thought to be good or bad, there will be more part-time work. The labour supply has been vastly increased by millions more married women coming into the labour market seeking part-time work. The numbers have increased from some 3·5 million married women participating in the labour market in 1960 to about 8·5 million or 9 million today. There are probably another 2 million who are not registered for work but who would like to work. The labour supply is therefore completely different. On the demand side, the pattern of business is such that people want part-time workers. Businesses want the kind of worker who can work flexible hours rather than someone who wishes to work a full-time, fixed-week year with a fixed career.
That is clearly a feature of the employment scene today. I am not indulging in futurology. The public policies that are required must facilitate and encourage that pattern rather than resist it, pretend that it does not exist or that it is a temporary aberration.
My next point is related to the language and presentation which my right hon. and hon. Friends sometimes use when addressing these problems. I know that one of the phrases that we hear from the policy makers is that people faced with the new conditions should "price themselves into jobs." I beg my right hon. and hon. Friends not to use that economic logician's phraseology. It is technically true that people are accepting lower wages in the form of part-time wages and are taking jobs. Hundreds of thousands of new jobs are emerging which are part-time jobs on part-time wages.
But pricing people into jobs sounds as if a lecture is being given and that people should accept a wage cut. That is a poor basis on which to persuade people that a new employment landscape exists under which different patterns of work will be required, and that people will have to look for their incomes and family living standards from different means rather than from one wage or salary from one job.
I also hope that we can move away from talk of work-sharing. That is a feeble and defeatist concept. There was talk about that, but it tends not to have found much of a place in policy thinking at present and I am glad about this. There is, of course, a kind of work sharing now, not as a result of Government policy but as a result of changing social patterns and attitudes. Women are rightly saying that they want to work outside the home for pay and that they are fed up with doing the hard work at home for no pay. The other partner in the marriage has to adjust. Some kind of work-sharing automatically exists in millions of homes as women take on paid work and the duties in the home are shared as are the duties outside the home.

That is an inevitable and healthy development. That form of work-sharing is creating a new pattern of employment and new attitudes in the labour market.
The MSC and the IMS reports emphasised that that leaves the problem of the unskilled. There is a segmented labour market, with an increasing demand for skilled people. Skill shortages are already springing up while the long-term unemployed and unskilled remain left out. The bizarre position exists in some areas— for example, in my constituency — where there are real and urgent shortages of certain skills. We hear again the dismal talk from the past about skill bottlenecks. At the same time, we are left with appalling unemployment figures and high levels of unemployment among the unskilled.
The Government are responding to the new landscape. They are moving slightly patchily and haphazardly towards new policies to adjust to it, but more open recognition is required of where we are and of the real employment situation.
If more people are self-employed or employed part time, school leavers must be educated and prepared for such a pattern. They must be prepared to change their skills three, four or even five times during their working life. That suggests a rather different type of education from that which many children have received hitherto. It is quite different from the proposition that everybody must expect a full-time job which will come from somewhere and, if it does not—that is tragically common—that person is on the scrapheap. That is a hopeless and destructive line of thought which starts in school and it must be cut off by new patterns of education.
Tax policies are becoming more favourable to self-employment and people who start their own enterprises, but we still have a long way to go. I wonder whether we have reached the point at which we should take seriously the idea of the Institute of Directors, which is that almost anybody who wants to should be able to aquire self-employed or subcontract status. I am aware that that sounds radical and will arouse cries of horror in the Inland Revenue, but I wager that, 10 years from now, that is the type of pattern to which our tax system will have shaped itself.
We must have more of the deregulation policies which my right hon. and noble Friend the Secretary of State for Employment has put out in his two excellent White Papers to allow the development of a world in which own or home-based work and self-employed activity can prosper rather than be regulated or planned out of existence.
As for the social security reforms which my right hon. Friend the Secretary of State for Social Services is trying to put through, the Government must build more on the concept embodied in the enterprise allowance scheme. I refer to insulated benefit. It is based on the idea, which may be anathema to some, that benefits should be insulated up to a certain point, regardless of what work activity or other income the recipient gains. Followed through entirely, the idea flowers into the proposal for a guaranteed basic income, which is a nice idea but is ruled out because it is hopelessly expensive. With insulated benefits, people who want to earn more can, and do not get into one of the various poverty traps or find themselves unwillingly joining the illegal classes by being in the work and draw category.
A little more money will have to be spent on Government capital spending in inner cities, which my right hon. Friend the Member for Henley (Mr. Heseltine)


has recommended with great vigour and panache. He speaks a great deal about seed money and pump priming. As I have said before, more should be done in that regard. I do not believe that the effects on employment will be dazzling or that jobs in the numbers that the hon. Member for Newham, North-East would like — he spoke of 50,000 jobs in health, for example — will appear, but such expenditure would help and would have the additional benefit of helping to clean up the country and improve our cities.
We must create a far more favourable climate for spreading capital and wider capital ownership as well as income. If Governments are honest enough to reckon that they cannot deliver a decent living standard to everybody through guaranteed full-time employment through income redistribution, it is through capital redistribution that some additional support at the edges—not a significant amount in the early years—can be developed. That is why I greatly welcome some of the Government's initiatives to encourage wider ownership among all income groups, including those on the lowest incomes.
We should examine more closely the bonus system of pay. Almost every job in Japan has an attached bonus arrangement. When people are taken on, they are taken on at the basic rate of pay without a bonus. The result is that there is far more encouragement for employers to hire more people than it' the newcomer had to be paid the same as everyone else. That system is one of the reasons why Japan has an unemployment rate of 2·8 per cent. and why it successfully absorbs would-be long-term unemployed people, giving them a continuing function, if not a full-time job.
I have outlined the changes of emphasis that we need and how existing policies must he pulled together to make a real push at the burning and unpleasant social problem of persistent long-term unemployment. They are somewhat different from the responses about which we have argued previously. They take us away from the idea that there is a general reflationary package which will miraculously reduce unemployment permanently. That cannot be done, and the suggestion that it can is a cruel hoax. We should concentrate instead on the policies that are outlined in the MSC report and which my right hon. and hon. Friends are beginning to gather from different Departments. They could take us not back to a fully employed society in the old sense but forward to a fully occupied society which will be both more satisfying and prosperous.

Mr. Michael Hancock: Most hon. Members look beyond the unemployment statistics to the depressing and hideous statistic concerning the long-term unemployed. They present a bigger challenge than almost any other group. Although many could fall into a job tomorrow if one were available, there are some who have suffered from enforced unemployment who need the extra help which I hope will be forthcoming.
I support the proposal to start job clubs, but remain suspicious about what they will achieve. The Government seem to bring out at least one new scheme each year in an attempt to show that they are doing something about unemployment and the mess that the economy is in. It seems that job clubs are in front of the Government's shop window this year.
It is interesting to note that, in the section on the restart programme in the Government's glossy booklet "Action for Jobs", the first step is an offer of a suitable job. The next six steps merely represent what is already available — places on the community programme and training courses, for example. The final step is the Government's let-out. It is a new one or two-week restart course to help people assess what they are good at and to show them how to look for jobs more efficiently.
I do not deny that courses would be useful to many people, but if no more than that is offered to unemployed people they will feel cheated and let down once again. When the Minister replies to the debate, I hope that he will give an estimate of the number of people in the various categories described in the booklet. Regrettably, I suspect that many will end up in the final category.
I understand that the initial pilot schemes for job clubs has been successful in getting jobs for the participants. However, the Government's restart programme with its job clubs lacks sincerity and will not create a single job. As the Chairman of the Select Committee on Employment said, it simply shuffles the vacancies around and redistributes them to different categories of people who are unfortunate enough to be unemployed.
This scheme will lack credibility in the eyes of the unemployed because the Government have not created the incentive of jobs that the restart courses will show people they are good at and for which they will be qualified. Alternatives are suggested and, undoubtedly, the community programme is important. If the jobstart scheme is to be as successful as the Government predict, there will not be sufficient places on the community programme to cater for it.
In the alliance budget statement earlier this year, we said that the community programme should be brought up to at least 460,000 places. The latest unemployment figures show that 1,356,000 people have been unemployed for more than a year, and clearly the Government have considerably understated the requirements for their own programme.
The other avenue is training and, as has been said in debates over the last two years, in that we lag far behind our competitors. One of the most telling paragraphs in the MSC's corporate plan reads:
Britain's performance on training is poor in comparison with that of our main competitors".
The right hon. Member for Guildford (Mr. Howell) spoke about Japan and its ability to cope. We lag hopelessly behind Japan in the sort of initiatives that have been taken there. I doubt the ability even of the Japanese to absorb for much longer the continuing progress of new technology and I doubt their ability to continue to find jobs for everyone. The right hon. Gentleman will find that his predictions for the future of Japan will somewhat reflect our own situation in relation to the effects of new technology.
There are still not enough training opportunities. Training and education should be restructured. I hope to develop that point later. An important component of training facilities is the skillcentre. The one in my city has been badly hit by cuts. I shall demonstrate later to the Minister how it has been neglected. Schemes for training exist, but they are insufficient and insufficient resources are devoted to their valuable tasks. The current


programmes are seriously underfunded and corners have been cut so that unemployed people can be taken off the dole list for as little money as the Treasury will allocate.
I hope that the Minister will develop the proposals about the MSC's corporate plan because the chairman's foreword predicts a chilly future. He says:
Over the planning period unemployment, especially long term unemployment, is likely to remain at historically high levels.
Clearly, the report was written within the constraints of the Government's straitjacket, but one can discern where the MSC would like to expand its activities. That is obviously in the training component of its work, and many of us have argued that this part of the MSC should come under the control of a Ministry of Education enlarged to cover training. It is a great pity that at one moment the Government appeared to be considering this option but then backed away from it.
Time after time the MSC document talks about close co-operation with the Department of Education and Science. Why do the Government not finally take the initiative and make the logical move to bring the two together? I know from experience in the city from which I come that many facilities are wasted. There is duplication of courses and insufficient flexibility. The skillcentre in Portsmouth illustrates the point that I am trying to make. Some of the courses there are under-subscribed but the machinery and the skilled teaching staff exist for those courses. Many schools in the area could benefit from using the skillcentre, with its modern equipment, to train youngsters at an earlier age. Regrettably, that cannot he done because of the constraints that are placed on the skillcentre.
The current structure of the MSC does not allow the person in charge of a skillcentre enough autonomy. He or she has to go through a long-winded process to get new courses off the ground, yet such people know from their experience of the areas in which they are operating that such courses are needed by the many employers who time and again try to negotiate with them for courses. We need a change in policy which will allow that autonomy to be given to the heads of skillcentres so that they can negotiate and immediately offer alternative courses for which there is a need.
There is almost a complete lack of market research and the staff at the centre do not always know the best courses to promote. That is because the placings for such things as job training schemes come through the jobcentre and the staff have no idea of what the public demands from job training schemes. The corporate plan recognises this, but insufficient emphasis is placed on that and existing projects are biased too much to the centre.
The local collaborative and responsive college projects must be expanded quickly. This is one area of the commission's work where the overall structure needs to be reviewed to improve training opportunities. The Government have used the poor structure as an excuse to cut back on the skillcentres. They are golden reservoirs and they are under-utilised. Schools should have better access than they have at present. I hope that the Minister will look at that and deal with it.
There is a great deal of complacency about the training undertaken by private companies. I see that in my constituency and I regret it. There is not enough in the plan

to encourage private enterprise to take advantage of the various schemes that exist. Some employers are not aware of the benefits and, unfortunately, some are not interested in any of the schemes. We need to find ways of making the schemes more attractive and of keeping employers better informed, and making them more willing to take on their obligation to try to retrain the people whom they constantly say that they need.
The report also deals with the recent review of vocational qualifications. The need for a flexible qualification system is essential and it must be based on achievement, not on time served. Qualifications need to be designed to bridge the gap between academic and vocational awards. More modular courses should be offered to allow the individual and the employer to obtain exactly what they need. In addition, the courses should allow people the chance to interchange between subjects not traditionally related.
It would be impossible to cover all aspects of the report and in the time that I have available I shall not attempt to do so. However, I should like to speak about another measure specifically related to the long-term unemployed. The corporate plan mentions the jobstart scheme and the pilot schemes that have taken place, but it does not tell us how successful they have been. Perhaps the Government could enlighten the House about that, because I doubt whether the schemes will achieve much. I doubt whether six months is long enough. I phoned my local jobcentre this morning to discover whether anybody had shown any interest in them, and I was told that nobody had and that there was not one response, despite the fact that the schemes had received fairly widespread publicity.
The challenge for the MSC is clear but it remains to be seen whether the Government have the will power to provide the necessary resources. At this time of record unemployment there is a widespread shortage of skilled labour, and low skill levels may well explain why. Even in factories where the equipment is the same as that in similar factories abroad, productivity is lower than abroad. In order to encourage companies to use existing MSC training courses, tax incentives are desperately needed. The YTS and especially the qualification systems need to he strengthened.
I urge the Minister to read two quotations, one of which is from the Government's own report "Action for Jobs". On page 35 it says:
Decisions about jobs, training and business are among the most important you're ever likely to take. But first you want to make sure you've got all the facts and are aware of all the opportunities.
The Minister needs to know all the facts and to be aware of all the opportunities that he has at his disposal before he invites the unemployed to take seriously his comments in that document.
The second quotation comes from the chairman's foreword to the MSC report. He says:
The Plan sets out challenging objectives which can only be attained with the support and co-operation of others.
Surely, if unemployment is ever to be stopped, we must find that co-operation. I am sure that in his endeavours the Minister is, like every other hon. Member, trying to achieve something better. But that will be achieved only if there is a willingness to put in the sort of resources that are needed to make retraining programmes relate to the needs of industry.
We should not take the over-pessimistic view adopted by the right hon. Member for Guildford about our


declining industrial base. We must find a way of using what we are good at. The one thing that British people have traditionally been good at is inventing and making things. We must find a way of bringing that expertise hack on the world stage and making ourselves once again attractive to the world as an industrial power.
When I recently visited Japan with other hon. Members I was not too impressed with its prospects. It will experience enormous problems over the commitment in various industries to provide jobs for life and the belief that jobs can be revamped. I saw golden opportunities for British industrialists to sell our products in Japan, but there was a great reluctance on the part of the embassy staff in Japan, and others representing Great Britain there, to sell Britain. It is depressing that in our major competitor in the far east no one is pushing hard for Britain and the people whom we represent.
I hope that when the Minister replies he will give the hope that is so desperately needed to so many of the millions of people in Britain who look for a lead and for help from the Government.

Sir Philip Goodhart: My right hon. Friend the Member for Guildford (Mr. Howell) delivered a masterly analysis of current employment prospects nationally and internationally. I agree with a great deal of what he said and I should like to discuss that with him. However, I am upset that he seems to have resigned from his earlier philosophical flirtation with work-sharing, and I was astonished to hear his proposals for work-sharing within the home. I can only hope that our wives never read today's Hansard. I am certain that they will not.
I see my brief role in the debate as rather more limited, and that is to urge my right hon. and learned Friend the Minister to look more favourably than he has in the past at two aspects of the report of the Select Committee on Employment. First, we made proposals for the creation of a substantial number of jobs on building schemes and environmental improvement projects in our inner cities. We have suggested that the way forward is to set up employment schemes.
I am happy to note that after the publicaton of that report the Government quickly announced that they would go ahead with environmental improvement programmes in selected target areas in our inner cities. They did not, as we suggested, go on to say that those jobs should be largely occupied by the long-term unemployed. But, as my right hon. and learned Friend the Minister has said on a number of occasions that many such jobs should be filled by local residents, that amounts to much the same thing. I am delighted that, at least in that respect, the Government are beginning to move down the road that we have signposted.
We also recommended that more money should be made available to promote employment opportunities in the social services and the NHS. We pointed out that the Government's policy of moving from institutional to community care inevitably means that there will be scope for more jobs. There is scope here for the development of a great many small local schemes.
Last week that admirable organisation, the Invalid Children's Aid Association, wrote to me as the Member for Beckenham saying that it would like to start a new scheme in Bromley to help families who are caring for severely disabled children. The scheme involves a person

called a care attendant going into the home to help parents with tasks such as bathing, feeding, dressing and changing. That gives the parents some relief from the physical strain of looking after a severely disabled youngster. The Invalid Children's Aid association says:
In our experience, several young people aged 16 to 19 have had to go into a residential establishment after leaving school, because there was inadequate community support to enable them to stay at home.
The association has picked out the names of 15 adolescents whose families would benefit from such a scheme locally. They suffer from conditions such as muscular dystrophy, spina bifida and cerebral palsy. Now that the children are older they are hard to move and the association knows that there is often a high incidence of back problems among the mothers of such children.
If the provision of one or two paid carers recruited from the long-term unemployed delayed the institutionalisation of five or six of those 15 children, the taxpayer would save a lot of money and a dozen or more parents would receive a lot of help.
In response to our proposals, my right hon. and learned Friend the Minister suggested that the administrative costs of supporting that sort of scheme would be high. He has estimated them at about £2,000 per job. However, in this sort of project the administrative costs would be minimal and could often be carried by the voluntary agency concerned. There is substantial scope here for increased employment which would, in some instances, save the taxpayer money.
Finally, I note that almost all commentators agree with our comments in paragraph 7 of the report when we say:
All the evidence is that, whereas a major fall in short-term unemployment would generate considerable upwards pressure on wages, a fall in long-term unemployment would not. Thus the Government's objective of growth without inflation would be well served by further measures directly aimed at the long-term unemployed.
Indeed, some economists would go further than that and suggest that the rehabilitation of the long-term unemployed would, in certain instances, actually reduce the pressure on wages.
I do not expect the Government, during the course of the debate or in the next few weeks or months, to say that they will adopt all our proposals. However, common sense suggests that in the near future they should take some further steps down the path we have outlined.

Mr. Ken Eastham: We are all grateful to the House for the fact that at least we have been afforded some time to debate this important report. Very often, the Select Committee on Employment has been involved in long inquiries in great depth and, unfortunately, the Government have not found time to allow us to air these issues in public. Nevertheless, I am grateful that at least we can hang on to a peg in the Estimates to have our way today and indulge in this short debate.
I was rather encouraged when I read a report in one of the national newspapers about the pending debate. I felt that it gave credit to all members of the Select Committee, except one. It said that only one Member disagreed after the inquiry. Unfortunately, that Member is not present today. I would have liked to say one or two things to his face if it had been possible. He voted against every recommendation from the Committee. It is worth going on


record to say that he had not really served to listen to the evidence which the rest of the Members had so meticulously investigated.

Mr. Don Dixon: In fact, the person involved voted against our response to the Government's attitude to our original report. I do not think that the hon. Gentleman was on the Select Committee when it made the report and recommendations.

Mr. Eastham: I would not argue with my hon. Friend and I do not want to over-indulge and use my valuable time talking about the hon. Gentleman's reasons for voting against all the recommendations. I got the distinct feeling throughout our inquiries that there was a genuine desire to look at the problem in depth and at least try to persuade the Government to make some positive recommendations.
I believe that when we commenced the inquiry and asked the various people to give us evidence we were thinking, along with other factors, about the human cost. We are talking about the sheer desperation of so many people nowadays. The social and moral consequences of workless people and their families being decimated is of greater importance than any of the other evidence that came before us.
I am sure that we all recognise—I certainly do—that unemployment is destroying family life. It is dividing husbands and wives and there is family breakdown of a dimension and scale that has never been seen before in this country. We are seeing an excessively high divorce rate and, consequently, increasing burdens being placed on social services and on local education authorities, which have to provide children from workless homes with school meals and the necessary clothing because some children are not even dressed sufficiently to be able to attend their lessons.
We are seeing massive rent arrears and heavy debts being accumulated and we are also seeing complete mental breakdowns, wholesale suicides, drug abuse on a scale that has never been recognised before and abnormal sickness levels. That more or less sets the scene for some of the comments I should like to make. It is because of those factors that the Select Committee was making a special plea—more than a special plea, a just demand — that there should be changes in the Government's attitude to the problem.
Additionally, there is the cost to the taxpayer. The cost of unemployment is £5,000 per head per year on average. When we consider that there are about 3·25 million unemployed, we know that the cost is well in excess of £16 billion per year and some people say that it can be as much as £20 billion. That is without mentioning some of the additional burdens being faced by the Health Service because of additional hospitalisation, drugs being prescribed by general practitioners and many other spin-off consequences of the sheer human misery and desperation that people face. They feel that nobody cares and that the Government and politicians could not care less. That is not the case. The Opposition are saying quite clearly that it would be our highest priority at least to give people hope and the chance of a job.
As people become long-term unemployed, so the problem becomes greater. We should consistently remind ourselves of the scale of the workless figures today. People

now become rather blasé when they say there are 3·25 million unemployed. We should also remind ourselves that of that number over 1·3 million are long-term unemployed — over a year without a job — plus another 200,000 under the age of 25 who have been workless for six to 12 months. Still more desperate, over 500,000 workless have not had a job for over three years.
However, the Government keep on telling us how successful they are. One Conservative Member went to great lengths to say that things will never change, that technology is here, we cannot provide jobs and nothing can be done. I contest that point of view. We are not Luddites. We are not saying that we resist change. We welcome change. However, if Conservative Members go to their local hospitals or social services departments to ask whether they could use additional people to help alleviate their burden, every area could tell the Government that that is the case.
Only last week I received a letter from a constitutent complaining about the care her husband was receiving in hospital. I made inquiries and the secretary at the hospital said that the complaint was true and apologised, saying that the hospital was undermanned. These are the areas where we contend that there are worthwhile jobs. Never mind the implication that we are talking about a periphery of worthless work: there are plenty of worthwhile jobs that could be done.
Not all the Government job schemes have been successful. I would also add — the Minister should recognise this when he replies — that we are strongly critical of the unrealistic rates of pay being offered in some of the Government schemes. Without doubt people are, rightly, refusing to accept poverty wages. We believe that realistic rates of pay could be offered. When one considers that it costs more than £5,000 a year to support a person without a job, it seems sensible to conclude that realistic rates of pay should be offered and should meet with the Government's approval.
The Select Committee in its recommendations seeks job guarantees for the long-term unemployed. If the Minister studies the report, he will see the type of worthwhile jobs that we consider could be tackled. It is ironic that the areas with the highest unemployment have the worst dereliction and the highest incidence of slums, inadequate housing, overcrowding and homelessness. Probably 1 million homes need modernisation and improvement, and at least 500,000 families are homeless. We have an enormous backlog of work which could be tackled through the creation of worthwhile jobs. The report also mentions maintenance, renovation and other useful jobs. I hope that the Minister will note in particular that we are seeking at least an average wage to enable a man to support his wife and family.
Several references have been made to social services. We suggested that 50,000 additional jobs should be created in the National Health Service. I am sure that they would he warmly welcomed, if the Government agreed to that modest proposal. We are not being unrealistic. The proposals could be phased in, and the chief officers of the Manpower Services Commission in their evidence gave us to understand that they could adopt some of our recommendations and employ the numbers we have in mind. Therefore, it is not good enough for Conservative Members to say, "We could never do this. It is too much and there are problems." We have already tested our


recommendations and we have seen the people involved, who have assured us that our target of 750,000 extra jobs could be met.
I sincerely believe that the figure of £3·3 billion as the overall cost for the implementation of these proposals is justifiable. We make no apology for our recommendations. People are no longer giving greater priority to tax relief than to job opportunities, and it is about time that the Government took that on hoard. Wealthy, selfish people may always be interested in more money, but if the Government canvassed the nation for its choice between providing more jobs and giving some people 6p in the pound tax relief, the overwhelming mass would support more jobs.
I commend to the House the report which the Select Committee has worked so conscientiously to produce, and I hope that the Minister will yield, reconsider the position and implement all our recommendations, particularly those on behalf of the long-term unemployed.

Mrs. Elizabeth Peacock: Unemployment is a disease of society throughout the world, and that disease in this country was highlighted when my right hon. and learned Friend the Paymaster General gave us the present figures. Perhaps it would do no harm to repeat them. There are 3,325,000 people unemployed. 1,357,000 people have been unemployed for more than a year, 845,000 for more than two years, and 567,000 for more than three years. Long-term unemployment is becoming the cancer of our society, and we must spend some money to cure it.
Today's debate is about not whether we should cure the problem, but how to cure it. My right hon. and learned Friend and my hon. Friend the Minister have already talked about work sharing. Perhaps I should quietly send copies of the Official Report of our debate to their wives who can then see what they said. The debate is not about costs, although they must come into our discussions. We are talking about the principles that must be established and about the actions that need to be taken.
As a member of the Select Committee on Employment, I supported the report that we produced in April, not so much because of the detail, but because of the principle. Unemployment is a problem and long-term unemployment is a disaster. The percentage of those unemployed are irrelevant to those who are unemployed. To the person who is unemployed, unemployment is 100 per cent., whether he be a man or a woman.
The problem of the long-term unemployed is that the longer they are unemployed, the greater is their difficulty of ever finding a job. I recognise that some of the schemes which my right hon. and learned Friend has already introduced are helping that difficult position. It is a clearly established fact that at interviews employers prefer those who have been out of work for a short time to those who have been unemployed for a long time. All hon. Members know that from talking to employers in their constituency. Some people have the impression, wrongly, that if someone has been without work for months or years, he will probably not want to work or he will be incapable of adjusting to the disciplines of the workplace. That is nonsense.
We must take steps to aid the long-term unemployed, and I still believe that the proposals in our original report

and our proposals in response to the Government's reply are basically along the right lines. Our three-part proposals remain relevant.
First, a new building projects programme, supported by local authorities, private agencies and private firms, agreed by the MSC and tendered for by private contractors, to provide 300,000 additional year-long jobs has merits still well worth discussing. The programme would be targeted specifically on housing renovation—many of us know from our constituencies how desperately we need that—and the renovation of schools and hospitals. Although much renovation is already taking place, more can be done. At present all those areas are demanding extra help.
I realise that we must consider the question of substitution of the community programme, but I have seen little evidence to date of the community programme targeting in on these specific areas. It is not proven that specific targeting as we propose would cause substitution of those at present employed in such work.
The question of cost is always at the back of everyone's mind, and we have been accused of underestimating the costs, especially those of management overheads and of sponsors for the MSC. Originally we proposed proceeding via a private tendering system which would have brought straightforward commercial pressures to hear and would have imposed the downward pressures of the market place. That is not such a bad idea. In this instance, the costs per job are somewhat higher than the £4,000 to £5,000 that we originally suggested, but not as high as the £9,500 suggested in the Government's reply.
Sometimes, we in the House underestimate the pressure of the market place, and we should not. I can give a simple example. We can think back to our arguments about the price of petrol after my right hon. Friend the Chancellor of the Exchequer made his Budget speech, and to the demands for action against the oil companies which wanted to recoup the increased tax. The market place sorted out that problem quite satisfactorily and quickly.
Our second proposal involved the social service; and the Health Service. We were looking for some 100,000 jobs, at an average maximum wage of £120, to be paid by the MSC for one year. In their reply, the Government have rightly pointed out the difficulties, particularly within hospitals, and we recognise them. There is always a danger of substitution in hospital jobs such as cleaning, laundry and catering.
However, one sector has not been adequately looked at by the Government, or if it has, that was not apparent in the Government's reply. I refer to community care. We have problems of inner city decay and of an increasingly elderly population. We have within our Health Service a policy to treat within our communities people with mental and medical problems. The Green Paper on the subject was called "Care in the Community". There is a demand within our society for special steps to help in these increasingly important sectors.
We might be criticised, and it might be suggested that this problem should be tackled by professional people and not by the long-term unemployed, but many among the long-term unemployed would be capable, with the correct amount of management and supervision, of helping in these critical sectors of community care. The Government and, if appropriate, the Select Committee should give further consideration to special action in the community care sector to provide some short-term employment


Thirdly, the Select Committee's proposal of a wage subsidy to employers in the private sector who take on long-term unemployed people is a suggestion that has a part to play in the overall strategy. Again, subsidisation of those currently employed, or the short-term unemployed, has to be considered. The proposed subsidy of around £40 a week for a year would have significant attractions for a small employer.
We always want to encourage and develop the small businesses, as we rightly believe that new jobs are created in this sector. We offer encouragement to the small business man to employ more labour. The merit of the Select Committee's original proposal was that it targeted particularly the small business man, encouraging him to take on a long-term unemployed person who has much to offer.
In our latest report, we are calling on the Government to initiate pilot projects along these lines, to be applied to those who have been unemployed for over three years. We do this on a simple and logical basis. While we costed our original proposals at £3·3 billion, the Government replied by saying quite plainly that our proposals would cost £4·3 billion. We do not know that we are right, but equally the Government do not know that they are.
As the chairman of the MSC has already said that he is confident that he could provide a guarantee about the practicality and viability of such schemes, we must put them to the test. We have to ask ourselves what happens if we do nothing. We shall never overcome unemployment — short-term or long-term—no matter what the colour of the Government. We have to innovate, experiment, and manage change. Therefore, I implore the Government, and especially my right hon. and learned Friend the Paymaster General, to look favourably at some of these proposals and start measuring them by practical experience, not just by theory.

Mr. Don Dixon: I pay tribute to my hon. Friend the Member for Newham, North-East (Mr. Leighton), the Chairman of the Select Committee, who opened the debate and explained the proposals and the work of the Select Committee very well. It is a disgrace that, after the many months of taking evidence and interviewing people and the many hours of work that the Select Committee put into its report, the Paymaster General tried to rubbish the report even before it was published. We know that he claims to have been an industrial worker. He told us on the Second Reading of the Sex Discrimination Bill how he had worked in the bakery industry to raise a few pounds between leaving school and going to university. We do not want lessons on industry or unemployment from someone with such experience.
One of the dangers about debates such as this is that they seem to be an academic lecture to the people outside. We talk about "the long-term unemployed", but this sounds like some of the terminology that we get from the parliamentary word factory. We are talking about an individual who has been out of work for a year, or two or three years. Often, that individual is the wage earner, and a person who wants work and has been denied it. Thousands have been denied work because of the Government's policies.
There is an uncanny resemblance between the present day and the 1930s in my constituency. I was born in Jarrow in the 1930s, I was bred there and have lived there all my life. In 1930, the steelworks closed, throwing 3,000 men out of work in an area that already had high unemployment. In 1934, the shipyard was closed by an organisation called Shipbuilding Securities Ltd. It was made up of a combination of merchant bankers, shipowners and shipbuilders, who decided to rationalise the shipbuilding industry. The same sort of policy was carried out under Graham Day as chairman of British Shipbuilders.
The company closed the shipyard, and Jarrow was murdered. My father and grandfather were thrown on the streets. My grandfather was not required again, and my father did not work until the war started in 1939. My father was taken back into the shipyard and was told that if he did not work overtime to build and repair the ships that were required for war he would be fined, after he had been thrown on the scrapheap in 1934 with another 5,000 Jarrow people.
This is the 50th anniversary of the Jarrow march, when 200 men walked from Jarrow to the central Government to let them know what was happening in the region. It is somewhat ironic that the Government are cutting regional aid and development. At that time, a scheme called the Jarvis Fund was set up. In 1937–38, my father had one month's work—making a park—under the Jarvis Fund, which was the charity given to Jarrow because we were sorely pressed. To get work from the fund, one had to be unemployed for three years. We were over the moon because my father had got a job making a park in Jarrow. We have the same system now, with the community schemes, with the same requirement that one has to be out of work for a number of months before getting a bit of work. That is a resemblance to the days of 1930.
Since the Government were elected, the last pit in my constituency has been closed and the last part of our shipbuilding capacity. Palmer's at Hebburn, is now doing only care and maintenance. The last steel plant in my constituency, the Jarrow mill, will close next month. That is an uncanny resemblance to what happened in the 1930s, and it took a world war to get out of that mess.
The Government say that the Select Committee's recommendations will cost money. Of course they will. We were aware, when we went into the debate and the many hours of evidence, that, at the end of the day, the recommendations would cost money. However, we were concerned about human beings being put on the scrapheap. People in their fifties are being thrown out of work in the north of England and in Scotland and Wales. In the present economic climate they have no chance of working again.
In paragraph 28 of their reply to the Select Committee's report, the Government say:
First, the Government's specific measures to assist long-term unemployed people are part of a wider economic strategy for encouraging enterprise and employment.
They should have said that the reason for long-term unemployment is the Government's wider economic strategy of not encouraging enterprise and employment.
The Paymaster General said a great deal about the restart programme. Indeed, in paragraph 31 of their observations, the Government say:


The aim will be to improve the skills, work experience and motivation of long-term unemployed people and help them get hack into jobs. Everyone who is interviewed will have the chance of one of eight ways towards finding work.
But the Government do not say where those jobs are. They intend to send out thousands of letters to the long-term unemployed saying, "Come to the jobcentre and we will have a talk with you." But there are thousands of unemployed people and no job vacancies in my area, so what help will the restart programme be? What help will the job clubs be able to provide? These measures may pacify some of the long-term unemployed, but they will not provide jobs. The restart programme will create not one job. All that is happening is that very many letters are being sent out.
The Government say that they have increased the community programme. However, all that they have done is spread the margarine even more thinly. A few years ago, the Government said that jobs under the community programme must not pay over £60 a week. That resulted in the creation of part-time rather than full-time jobs under the community programme.
I pay tribute to both sides of the Select Committee. It contains a majority of Conservative Members of Parliament. They worked every bit as hard as Opposition Members. The Select Committee's recommendations are realistic_ constructive and necessary because of the length of time that people have been unemployed. It will be a disgrace if the Government do not accept the recommendations and try to get the long-term unemployed back to work and providing for their families.
The Prime Minister says that she is a family person. Therefore, she should say that the Government intend to provide finance to create jobs so that family people can provide for their families. I hope that the Government will accept the Select Committee's recommendations.

Mr. John Maples: The hon. Member for Jarrow (Mr. Dixon) speaks with great passion and personal experience of unemployment. I hope that he will forgive me if I do not follow him down that road. Instead, I want to make two specific points to the Under-Secretary of State, my hon. Friend the Member for Rossendale and Darwen (Mr. Trippier).
The underlying need is to create sufficient jobs to absorb unemployment, but all reasonable analyses show that this will take a considerable time. In the meantime, the range of schemes and alternatives that have been produced by the Manpower Services Commission is imaginative and extensive. The Government deserve to be congratulated. Those who have spent any time upon examining the problem of unemployment know that training a more highly skilled work force and encouraging new businesses and self-employment through the kind of enterprise schemes that are sponsored by the MSC are two of the ingredients in the long-term cure of the problem.
I want to deal briefly with one element of the third part of the MSC's package—the employment programmes. I refer to the restart programme, which has been unfairly derided by the Labour party. It attempts to bring back into touch with the world of employment those who have been out of work for so long that they have lost touch with it. In many cases these people were made unemployed by the recession and they have not got back into employment in the way in which people tend to do so now. If people are

made redundant now, the odds are that in about 50 per cent. of cases they will have found a job within three months and that in about 80 per cent. of cases they will have found a job within a year.
Those people do not have a long-term unemployment problem. The problem affects those who have been unemployed for some time, and their problem regrettably grows worse. When an employer looks for a new employee, he is inclined to take somebody from the front of the shop, so to speak — that is, somebody who has been unemployed for a relatively short time. This puts the long-term unemployed out of touch. They give up. They lose contact with the world of work and even lose confidence in their ability to get a job.
The restart programme performs the very important function of bringing them back in to touch with the world of work and with the available options and opportunities. The restart programme does not necessarily guarantee a job, but it considerably improves one's chance of obtaining one.
One interesting aspect of the restart programme is that it was tried out in about eight localities before it went national. That is an excellent precedent. The concept of trying out ideas locally before they are brought into operation nationally is one that the Department of Employment—and the Treasury, for that matter—could extend. Frequently the reason for not putting programmes into operation nationally is that the Government do not know whether they will work and how much they will cost. If a programme is tried out first on a local basis and is found not to work, or not to be cost effective, or not to produce results, it can be dropped. However, if it works, it can be tried nationally. That concept should be exploited. It should be applied to many of the ideas that are being explored in an effort to do something about the problem.
My hon. Friend might care to try out more ambitiously, on a local scale, the concept of job subsidies. This principle has been accepted by the Government and the MSC through the enterprise allowance, the job start scheme and the new workers scheme. I suspect that one of the reasons for the job start and new workers schemes not doing better is that the subsidies are not large enough. However, with greater subsidies, the cost would he greater if the schemes were not successful. Therefore, it would be worth trying out a more generous scheme on a local basis—in, say, four or five areas.
The difference in cost to the Treasury of somebody being unemployed and somebody being employed is enormous. If somebody is employed and takes home an average wage, he pays about £4,000 a year in tax. If he becomes unemployed, he collects about £4,000 a year in benefits. This represents a difference of £8,000 to the Treasury between somebody being employed in the private sector—it is important that the employment should be in the private sector—and somebody being unemployed.
Not everybody, of course, is an average earner. However, even in the case of an unemployed 17-year-old who has never worked and who lives at home, that figure is £50 a week, or £2,500 a year. There is a large amount of money with which the Government can play and which they can use as a catalyst in the job creation process. It would be worth trying out a more generous job subsidy scheme in a few specific areas to discover whether it works. If it works and if it is cost effective in the way that I and a few other people think that it might be, it could be


extended nationally. If, however, it did not work, it could be dropped. At least it would not have to be tried out on a national basis first, which would be very expensive and risky.
That leads me to the second point that I want to make to my hon. Friend the Minister. There should be a regional approach to the unemployment problem. Unemployment varies enormously from region to region. Unemployment in the south-east and London cannot be compared with the problem that is experienced in constituencies such as that of the hon. Member for Jarrow. Therefore, it is foolish to implement national schemes, which have a huge deadweight cost in the south-east, in order to try to create jobs in the north-east and in the midlands. Therefore, a more regional approach to the problem ought to be adopted.
I suggest three areas where that kind of approach might be adopted. First, we should target some of the specific measures that we know help to create jobs on a regional basis, instead of trying to implement them nationally. If there are to be national insurance reductions on employers' contributions, job subsidies and extended home improvement grants, there is a great deal to be said for targeting those subsidies in regions where there is high unemployment instead of spreading them over the whole country.
The second area where a regional approach might be adopted relates to public sector employment. The public sector employs a very large number of people. One of the main computer installations of the Department of Health and Social Security is in Reading. In the context of the Government trying to help to reduce unemployment in the regions, that does not seem to me to make very much sense. It would make much more sense to move that installation to the north-east where the Department's other main computer installation is sited. The Government employ a large number of people. For instance, many people are employed in the Ministry of Defence and the armed services. Whether or not we should deliberately adopt a policy of moving public sector employment away from the south-east and towards the north seems to bear serious examination.
My third point is that London has become an incredibly powerful magnet in the British economy. One could make speeches and write books on that, but I shall only touch on it now. London's influence as a magnet for industrial and political power, money, jobs, and industrial expansion is too powerful for the good of the country. It sucks in the nation's savings from all over the country. There is a concentration of industrial power and industrial decision-making in London in a way which operates beneficially for the south-east but not for the rest of the country.
It seems to me that an element of our regional policy should be not only to encourage the move towards and development of industry and commerce and economic activity generally in the non-south-east regions, but actively to discourage from locating there enterprise which does not need to be in the south-east. The French have such a scheme and I believe that it works quite well. The scheme involves setting up specific regional centres to attract industrial and commercial development to them, and giving them the infrastructure, communications, and

so on, to do so. We should attempt to reverse the rather pernicious magnetic effect that London has on the nation's resources.
We should and can build on the excellent work that the MSC is doing. In doing that, we might look seriously at trying out some of the schemes on a local basis, so that we can test their effectiveness before they go national, and adopting a more regional approach to solving what is essentially a regional problem. Such policy initiatives might help to form part of the package which we are developing and are trying to continue to develop to help cure the awful problem of mass unemployment.

Dr. Norman A. Godman: It is a depressing exercise to compare and contrast the reports of the Select Committee on Employment with the Government's response. I wholeheartedly welcome what the Committee said in paragraph 25 of its report on the Manpower Services Commission's corporate plan:
With the Committee's recent Report on special employment measures in mind, we asked whether, if a political decision were taken to guarantee, for everyone out of work for three years, an occupation more profitable in cash terms than being on the dole, the MSC could deliver. The reply was a firm, 'absolutely'.
I shall refer to the MSC's role, the community programme, training, and the massive problem of unemployment. Some people talk readily of the unemployment rate in Great Britain, but they choose to ignore the geography of unemployment. The unemployment rate in Great Britain as a whole is about 13·3 per cent. In Scotland, the figure is 15·6 per cent. In the Strathclyde regional authority area, the figure is about 18·5 per cent. In the Greenock travel-to-work area, the figure is 21·4 per cent. In Greenock and Port Glasgow, the male unemployment rate is a scandalously high 26 per cent. Those are the official statistics. According to the official statistics, there are approximately 359,000 people out of work in Scotland. In my constituency about 6,500 men and about 2,400 women are without work.
Given the extent in Scotland of what the right hon. Member for Guildford (Mr. Howell) called the ugly and nasty problem of unemployment, I welcome the Select Committee's reports on that vicious and nasty problem. In the few minutes remaining to me, I shall speak of my concern, naturally enough, about unemploment in Scotland. I shall refer to the measures needed to reduce the appallingly high Scottish unemployment figures. Much of that unemployment has been brought about by structural decline in Scottish manufacturing — for example, shipbuilding, steelmaking, textiles, and engineering. In addition, there has been a massive decline elsewhere. The coal mining industry is a sad case in point.
The west of Scotland is in a dreadful economic condition. As I mentioned earlier in an intervention in the speech of the right hon. Member for Guildford, the newer industries are not immune from the process of shedding labour. Already, the results of lower oil prices are coming through in employment prospects, especially in Scotland. Many of the onshore oil fabrication yards are running out of orders as new developments are being postponed. The British Indigenous Technology Group, which represents indigenous British companies working in that important industry, reports that its members expect to have lost some 15,000 jobs between February and the middle of this year. When we talk about the need to combat those problems,


I suggest that in that industry there needs to be a modification to the petroleum revenue tax allowances and the payments schedules. In addition, I urge on the Government the need to offset expenditure on new field developments against income from producing fields. I think that there should be some kind of allowance for corporation tax to minimise the problems of unemployment in the industry.
Jobs are badly needed throughout Scotland. The Manpower Services Commission has an important role to play regarding training and the community programme. I have complained about the MSC in Scotland before, and I shall do so again tonight. The commission's officials must, at all times, react in a sympathetic and helpful way when dealing with applications for assistance from community groups. A number of complaints have been brought to me concerning the unhelpful attitude of the MSC. I believe that the MSC should be more sympathetic to individuals seeking assistance to enhance their job prospects.
I give an example that I come across in my constituency. It relates to unemployed welders in particular. Unemployed men seeking to find work offshore — God knows that it is difficult enough as it is — are frequently barred from employment because they lack a survival training certificate. The oil companies demand that any job applicant must have such a certificate before he is taken offshore. Many of those concerned work for contractors under a short-term period of employment. The contractors are not concerned with such training. Given that such a course of training lasts three or four days and costs about £300 to £400, in my view the MSC should help — the state should help such people who actively seek work in the offshore oil and gas industries. The MSC is failing those who seek help.
I refer to the growing trend of periods of short-term employment in many industries. I believe that Parliament must pay close attention to that growing phenomenon. It affects many skills. I know that the trend is found throughout the European Community, but I should like to know the Government's position on short-term employment.
Given the remorseless decline in recent years of the Scottish manufacturing base, it seems to me that people are not being trained or retrained to adapt to changing industrial needs. On the contrary, they are educated to accept unemployment. That unemployment has its own distinctive geography. The Government tinker with a massive problem—a problem which always generates poverty, misery, and deep distress. That is one of the reasons why the Conservative Administration are so thoroughly unpopular in Scotland.

Mr. Peter Thurnham: The whole country is yearning for an end to unemployment. The Employment Committee did an excellent job in setting out the problem. It attempted a solution, and we all look to the Government to discover additional solutions if the Committee's report is not acceptable.
The figures in table 2 in the annex to the first report tell the story. For the past four years, the numbers of males unemployed for less than three years have decreased, but the numbers unemployed for more than three years have

increased from 145,000 to 427,000. According to the latest figures for male and female unemployment, 560,000 have been unemployed for more than three years.
Beveridge said:
The danger of providing benefits which are both adequate in amount and indefinite in duration is that men, as creatures who adapt themselves to circumstances, may settle down to them … Men and women in receipt of unemployment benefit cannot be allowed to hold out indefinitely for work of the type to which they are used or in their present places of residence, if there is work which they could do available at the standard wage for that work. Men and women who have been unemployed for a certain period should he required as a condition of continued benefit to attend a work or training centre … The period after which attendance should be required need not be the same at all or for all persons. It might be extended in times of high unemployment and reduced in times of good employment; six months for adults would perhaps be a reasonable average period of benefit without conditions.
We have seen dole queues lengthen for six years and more.
If my right hon. and learned Friend the Paymaster General and Minister for Employment does not feel able to accept the proposition of a guarantee which is put forward in the Committee's report, I ask whether he can find a form of words which is almost tantamount to it to the effect that, in the work and training schemes which are available, increased priority will be given in proportion to the period of unemployment. If sufficient funds were available, he would come to almost the same answers as the Committee.
I remind my right hon. and learned Friend the Paymaster General of the schemes in Bolton. He has seen one of our schemes, and two others are coming forward. I ask my right hon. and learned Friend to reorient the priorities in that way on 1 July and to hire, in addition to the 2,000 magicians he already has, a sufficient number to ensure that we meet those priorities.
The community programme should be not just for the worthwhile jobs which would otherwise be done but for the worthwhile people who would not otherwise be employed. We are concerned about people. All people are worth while, and that is why we have to set certain priorities.

Mr. John Prescott: I should like to add my congratulations to the Select Committee on Employment which has done considerable work and analysed the problems of unemployment. I am especially pleased that most Committee members reached the same conclusions and came together to analyse a number of the Government's proposals and be critical of them.
I think that all hon. Members would congratulate those Select Committee members who can come together in a critical analysis. Presumably, the effectiveness of their analyses will be judged during the period of the next Administration. I hope that the Select Committees will continue their critical approach to the policies of the Government, whether Labour or Tory.
I especially congratulate my hon. Friend the Member for Newham, North-East (Mr. Leighton), the Chairman of the Employment Committee, and the other Committee members who have spoken in this debate. My hon. Friend analysed the problem well and made it clear that he was not challenging the Government on the basis of whether we could return to full employment. That would be a debate between both sides of the House. We believe that


the Government can be challenged on that basis. Admittedly, the issue is not whether everyone can have a 40-hour-week job. Clearly, major changes are taking place in the employed labour force. There is no doubt that, to achieve full employment, we must deal with the radical changes in the distribution of wealth.
The issue is whether the Government can do more than they are doing, especially with employment schemes. The Committee made the sensible point that more can be done in the provision of jobs and training. That is similar to the Labour party's claim that we can get 1 million jobs in two years — from public expenditure programmes, schemes and the mixture of suggestions made in the report. We must, however, recognise the realities. Even when those 1 million jobs were being created, 3 million people would still be unemployed. We certainly have a long way to go to achieve full employment.
My hon. Friend the Member for Newham, North-East, and the Committee, in noting the Government's response — in which they churlishly rejected much of the Committee's analysis and suggested that it would cost more than the Committee thought to create new jobs — have said, "Fine, if the Government think that jobs will cost more than we have said, we are prepared to accept 500,000 jobs, instead of the 750,000 mentioned and the menu of proposed schemes." Can we create more training places and schemes in the way suggested in the report by extra expenditure? That is the real question. I shall not quibble about whether it is £3 billion or £4 billion. The question is whether the House is prepared to endorse such an approach.
The Government have made it clear that they dispute the amounts of money involved and the scale of jobs or placements which can be provided and are not prepared to accept the general argument to go further along the road in building upon existing schemes. That is an important decision which reflects the Government's total indifference to doing anything about long-term unemployment. I must justify that comment. It is argued that the Government are not doing enough. Since 1979, youth training schemes have trebled. Of course, this reflects what has happened to unemployment, which has trebled as well. I shall not argue about the various fiddled figures we have been given — 3 million unemployed is a very large number.
In earlier debates, we have laid the charge that much of the unemployment is brought about directly by the Government's policies. I should like to refer to the provision of "real" jobs. I do not like using that term, because, with the changes coming about in the labour market, we must recognise all the different descriptions of gainful occupations, whether part-time, full-time or any other employment. We readily recognise that.
The sole purpose of the Government's policy is to create part-time, low-paid, cheapie schemes. All the present schemes are geared to achieve that end. That is one of the criticisms of the Government. In looking at the way in which the Government have created unemployment, one begins to understand how some of their policies can be reversed. At the heart of the argument is the Government's response to the Select Committee's report on long-term unemployment. Paragraph 18 says:

Additional spending on this scale would pre-empt the scope for tax reductions necessary to stimulate enterprise and employment.
The Government choose to keep their money for tax reductions. Apparently, according to surveys in yesterday's newspapers and last night's "Panorama" programme, even the Tory party and Tory voters are asking whether the best priority is to give more money to those who have a lot while the low-paid and the unemployed pay the price. That is a central choice for the Government to make. We are challenging them, as did the Committee.
It is argued also that it costs far too much to create jobs. The Minister for Employment has talked about a cost of £8,000 or £9,000 per job. We have seen, in justification for proposals on enterprise zones, a cost of £70,000 to create each job. In defence, the cost is £45,000 or £50,000 a job. Even tax cuts create jobs only at a cost of about £46,000 a job.
In view of the present level of public expenditure, if the Government are subjected to a type of jobs audit, they may be able to screw an awful lot more jobs from public expenditure than they do under the present order of public expenditure priorities. If more is spent on education, defence and certain other services, more jobs can be created because of the nature of the activities involved.
The crucial question which we should begin to consider is not how many jobs are created by extra expenditure — although we argue that case — but the increased number of jobs that can be provided with a different order of priorities and different levels of expenditure. That is one of the significant differences between Britain and its competitors in the Organisation for Economic Cooperation and Development. Comparisons have been made between the way in which we use our public expenditure and the methods used in some OECD competitors. I was recently looking at Swedish public expenditure in local authorities. In Sweden the number of people employed in local authorities has doubled in the period from 1970 to 1984. That has happened under different administrations, but largely Labour authorities. In this country, from 1970 to 1984 there has been an increase of 10 per cent. But since 1979 there has been a reduction of more than 100,000 jobs in local authorities, because the Government have decided to reduce public expenditure.
When we consider the sort of jobs that have been thrown out, we begin to see some of the thinking behind the Government's strategy. For example, the recently-announced cleaners scheme with Virgin Airlines or Branston, or whoever he is, is apparently going to clean up our streets with 5,000 people on community programme schemes. Mind you, a lot of CP schemes are unfilled and no doubt 5,000 cleaners will be given £65 a week on this scheme. In reality, more than 5,000 cleaners from public health authorities have been sacked because of the squeeze on public expenditure.
There is an essential difference, quite apart from the privatisation point, in that the cleaner before probably cost £116 but now the cleaner will cost £65. That is part of the Government's strategy to force down wage rates and get it done more cheaply. We are paying people on the dole to do it, although in these circumstances the cleaner may have been employed by the local authority at £120 a week but may now be offered a job with Virgin Airlines,


Branston, or whoever is running the system at £65 for doing the same job. They will feel aggrieved. They might not even accept the job.
The Government are waiting for them there. They have just moved an amendment to the Social Security Bill. If someone refuses one of these schemes, he is likely to face a 13-week suspension of benefit. That, of course, will not force anybody into a job on half pay. The suspension comes into operation when someone refuses to take work when it is offered. The Paymaster General derives great glee from the fact that people who do not accept a job at about half the rate of pay will be taken off the dole and taken off benefit. He wins all round and makes a profit out of it. It seems that the Paymaster General has learned a great deal from Murdoch and what he did to the printers.
Housing is another area of public expenditure that we should look at. We produce houses at a rate of 2,000 a week less than in a comparable period of the previous Labour Administration. There are half a million building workers on the dole, and it is costing £3 billion to keep them there, but that does not seem to worry the Government at all.
I have heard all this jargon about dead weight. It is not dead weight to pay people to do nothing when there are people desperate for houses and we are producing 2,000 fewer houses a week than under a Labour Administration. It seems crazy, particularly when some of the schemes talked about by the Select Committee are basically in the construction sector of the community programme. In those areas, the industry and the trade unions are becoming increasingly apprehensive as they watch the Government switching from proper construction programmes to these cheapie labour gang schemes that the Minister talks about. He will not he surprised that people become more apprehensive.
In transport, there was expansion in all the areas I was talking about in Sweden. Here, with the deregulation of transport services—the Minister was much involved in that —a further 9,000 bus men will be thrown on the dole by October. I assume that the Ryedale by-election has made no difference to that, but I expect that the news will shake up a few rural areas when they realise what is going to happen to their transport system.
There will he 9,000 people paid for on the dole, and they will be offered jobs on Branston's cleaning-the-streets schemes, for considerably less cash. The public expenditure profiles of our competitors show that they have done far better than us in growth and economy, with lower inflation rates, and done it very successfully. Those are not only Labour or Socialist Governments. Governments of the Right have been able to achieve more effective records than us.
A significant factor is the way in which other Governments use public expenditure as a means of creating jobs. That is the realistic difference. The Government believe that their arch policy is to reduce public expenditure in that sphere. Whatever the debate has been today on the provision of long-term employment schemes and the role of Government, that has not been at the heart of the debate.
At the heart of our debate are the schemes and the roles they play. In passing, it might be well said by some people — we have said it before in debate—that Labour will produce 1 million jobs in two years. Various schemes have been put forward by the CBI, the churches or the wets of the Tory party — all the various mixtures that can

produce more jobs. I was interested to read in the Financial Times of 19 June 1986 a report headed "Labour's Plan for Jobs". A report by the City university business school says of Labour's proposals that
they will need to he taken very seriously as a genuine alternative to the present Government's approach".
The man who came to the conclusion that Labour's policy can actually produce 1 million jobs in two years is Professor Brian Griffiths, now the head of the Prime Minister's personal policy unit at 10 Downing street. Having fed Labour's plan into his employment models, and despite a fervent belief in the Government's policies, Professor Griffiths is now saying to everybody that it is possible to get 1 million jobs in two years. He says that a Labour Government could reduce unemployment by half according to their policies. That seems to be such an authoritative source that even the Paymaster General might accept it. I recommend that people read the Financial Times of 19 June 1986, instead of just slating the idea that Labour can produce its plans.
The debate in the Chamber has been largely about the provision of schemes through the delivery system of the Manpower Services Commission. In some of those schemes, the wage rates and productivity are considerations without a doubt. But the level of investment is also crucial to productivity, and the effeciency of our economic machinery. When one considers that we have totally failed to achieve a level of investment in our economy that is comparable to our competitors, we should ask ourselves whether the Government's policy of wholesale tax cuts for companies has been effective. They are making mass investment and profit, but they are not putting it into investment.
More important is the fact that the Government are making no input into training. Here I want to say something about training aspects of the programmes. The community programme schemes that have been talked about today have a role to play. Let me be clear about both youth training and community programme schemes. There is a role for them; I have always said that. But there is a place for great improvement. For example, I have seen some very good YTS schemes, which basically work with the industrial training boards that remained after the Government had abolished 16 out of 23 of them, the ones that even the Government claim, usually in construction and engineering, maintain some form of industrial training, but in reality we do not invest in training at anywhere near the level that we should.
Indeed, the report "Competition and Competence" shows that the level of investment in training in this country is equivalent to about 0·15 per cent. of turnover, whereas it says that our competitors are spending about 1 to 2 per cent. That is about £5 billion to £6 billion.
The Government are spending about £2 billion on the community programmes and YTS, but the trouble is that industry is offloading even the limited amount of investment in training and apprenticeships that it used to have. In fact, industry is now using YTS as the first part of apprenticeship schemes. It is making a profit out of it. Even in areas where industry should be training apprentices, it is even offloading it to YTS. It is a scandal that industry in this country ducks its responsibility and does not pay its fair share for training. Let me make it absolutely clear that if a Labour Government comes in industry will pay its fair share on the scale necessary to include adult training, not just training for our youngsters.
Even the resources that have been available under the MSC since 1979 are reducing. They are a quarter of the amount that goes to YTS schemes, when three times as many people are involved in adult training than in YTS. We have got it out of order, primarily because the Government are not prepared to force industry to pay its fair share towards training.
Even the CBI, in its evidence to the Employment Select Committee, said that it was all for training, but industry must not have any more of the cost of it. What a deplorable reply from industry, which does not invest in training and then tells Government how much they should put into programmes. Quite clearly, we need community training, but I have it firmly impressed on my mind that if we get money for training the delivery is important. No doubt the Manpower Services Commission will play a part.
Certain bodies such as British Rail Engineering Limited, York and Brough Aerospace could do considerably more. Indeed, I visited Brough Aerospace this week-end and looked at its schemes. Its training is very good, and is part of a modular system. We should consider such bodies as training agencies that can provide proper and adequate training. Perhaps we should even pay them out of those funds.
We must address ourselves to the problems that are outlined in the report. In view of the time, I shall conclude. The Minister seems to be moaning, but he should talk to his Back Benchers who sought to speak. I shall conclude by referring to the MSC. It was a good body, and was set up to do a good job. It is doing a difficult job, and has been sullied by doing much of the Government's dirty washing. I do not think that the MSC can continue to play that role. We are radically rethinking what the role of the MSC should be. I give those involved notice that we see a different role for it. Sweden has a similar body, but it plays a much more effective part in that economy's growth and in the quality of training.
In view of the time, and the few minutes left to the Minister, I shall end by saying that there is an alternative. But frankly this Government do not care a damn about that alternative. They are only playing around with community schemes, and tea and sympathy. They could do more, as the Committee has said. I should like to hear the Minister's reasons for rejecting that approach.

The Paymaster General and Minister for Employment (Mr. Kenneth Clarke): I had thought that the hon. Member for Kingston upon Hull, East (Mr. Prescott) was about to conclude with some remarks on training. I agreed with part of his diagnosis of the problem, but not with his solutions. Indeed, my hon. Friend the Member for Carshalton and Wallington (Mr. Forman) slipped over to tell me that he intended to raise the same subject. I apologise to both hon. Members because time is pressing, but I certainly hope that we have an opportunity to discuss training policies on some future occasion.
I also apologise to my right hon. Friend the Member for Guildford (Mr. Howell), who produced a masterful analysis of the employment scene. He touched on several issues with which I have much sympathy, and I should have liked to debate them. I am very interested in one of the ideas, although he gave it a name that I have never

heard of—insulated benefit—which sought to encourage the unemployed back into work. I hope that I shall have an opportunity to do justice to his speech on another occasion.
Obviously, the subject of the debate is the Estimate and, in particular, the Select Committee's reports. The hon. Member for Newham, North-East (Mr. Leighton) gave a somewhat partisan presentation of the Committee's report, although he retreated into agreement when I pressed him. But it was obvious from his speech and from the speeches of my hon. Friends the Members for Beckenham (Sir P. Goodhart) and for Batley and Spen (Mrs. Peacock) that there is a measure of agreement between the Government and the Select Committee, at least in our aims. We are undoubtedly coming closer to an agreement on measures, as the Select Committee modifies its proposals in the light of the Government's response.
There is no disagreement between us about the plight of long-term unemployed people — about the difficulties that they face in breaking back into the job market and how those difficulties increase, as my hon. Friend the Member for Batley and Spen underlined, as the period of unemployment lengthens.
There is no disagreement between us either about the need to focus urgent and specific help on long-term unemployed people. The Government have steadily increased the resources available for measures to help the long-term unemployed. This year we shall be spending £1·2 billion — an increase of 20 per cent. over the previous year—on programmes specifically for the long-term unemployed. We agree, too, that there must be some direct Government intervention to provide temporary jobs for long-term unemployed people. If we thought otherwise, we should not be providing jobs for more than 300,000 long-term unemployed people in a year on the community programme. At a later date, I shall take up the assertion of the hon. Member for Newham, North-East that the report calls for a further doubling. As far as I can see, it calls for no increase on the Government's present plans.

Mr. Leighton: Will the right hon. and learned Gentleman give way?

Mr. Clarke: I shall not give way as I have only half the time to speak that the hon. Gentleman had.
Our disagreement with the Select Committee, therefore, centres principally on what constitutes the most cost-effective and practical package of measures to provide the assistance that long-term unemployed people undoubtedly need. The Select Committee's approach, set out in its first report, involves an attempt at job creation measures on a truly gigantic scale — 350,000 extra temporary jobs in building and construction; 100,000 temporary jobs shared between the social services and the Health Service; and 350,000 additional jobs in normal employment achieved through a subsidy to employers.
I do not quarrel just with ambition; there are considerable financial and, more importantly, practical difficulties. On our calculations, the Select Committee's original package would require nearly £6 billion in gross expenditure and more than £4 billion net. That would be additional to the £3 billion that the Government are already spending on their employment and training measures. In addition, the cost of the individual proposals would be between £7,000 and £9,000 for each extra job


created, or four to five times the average cost per job of the measures that we currently run. By any standards, this is a massive programme of expenditure, and it is incumbent on those who propose and support it to tell us where the extra money is to be found. That is obviously an important matter which goes beyond the remit of the Select Committee.
But we did not reject the plan on the ground of cost alone. There is an even more serious objection to what the Committee proposed, and it is one of practicality. Our view, based on our great and growing experience of both temporary employment programmes and employment subsidies, is that the Committee's proposals simply could not be achieved. It is with genuine reluctance that we have come to the conclusion that they would not work.
We are already supporting 300,000 long-term unemployed people this year in jobs under the community programme. Nearly 20 per cent. of the programme involves some building, construction or refurbishment work, and 30 per cent. involves jobs in personal and social services. I commend to the House and the Select Committee our recent efficiency scrutiny of the programme, which was designed to take stock of the situation and to discover how we can manage the programme most effectively for the benefit of the long-term unemployed. That scrutiny showed clearly that there are limits to how far and fast the programme could be expanded.
The danger of rapid expansion is that the quality of the work experience offered to long-term unemployed people may be reduced. I shall take an example that I have concentrated on before — the Select Committee's proposal for an extra 50,000 temporary jobs in each of the health and social services sectors. On the face of it, it is one of the most attractive of the Committee's proposals. I am most interested in it, because when I was Minister for Health, I was a genuine enthusiast about going over to a community-based model of care instead of having long-term stays in old institutions. But the important point is the reality of what is proposed.
It is a mistake for those outside the health and social services sector to look upon community care as some sort of unskilled cheap alternative to hospital-based services. Those who still abide by that idea, including my hon. Friends the Members for Beckenham and for Batley and Spen, who gave all the reasons for looking at the community model, should ask the management and—as my hon. Friend the Member for Bolton, North-East (Mr. Thurnham) said — the trade unions what they would think about 100,000 untrained people who have been out of work for three years or more being given temporary contracts in order to provide that care.

Mr. Andrew Rowe: Will my right hon. and learned Friend give way?

Mr. Clarke: I apologise for not giving way, but I am making one of the shorter speeches today.
Finally, there is the proposed employment subsidy. Our experience is that such subsidies must be carefully and specifically targeted if they are not simply to support jobs that would have existed anyway; and they must be associated with some wage limit if they are not to be inflationary. The Committee's proposals are defective on both of those counts. Our estimate is that it might be

necessary to pay subsidies for 850,000 jobs to create the extra 350,000 which is the Committee's target. That is too expensive and unrealistic.
But the debate on this immensely serious matter—the problems of the long-term unemployed—has moved on. To the Committee's credit, it has responded to our arguments by scaling down the size of its proposals, so that it is now talking about a target group in the first place that is 40 per cent. of the original size. But that does not remove all the difficulties. There would be more than £1 billion of extra expenditure and an even greater net cost per job created. It would certainly be four to five times higher than the current measures, and it would still involve major practical problems. For example, the health and social services point is just waved away and glossed over in the third report, although the difficulties remain.
Thus, we continue to express reservations. However, we are at one with the Committee on the need to take quick and effective measures to tackle the problems that it has identified. The one thing that we are all agreed on tonight is that we must do something. There will be no answer to the problems of the long-term unemployed if we do nothing. The Government are acting on a similar but alternative course that is on an ambitious, imaginative and massive scale.
Next Tuesday, 1 July, we shall be embarking on the most ambitious and comprehensive programme yet attempted to assist the long-term unemployed. In contrast to the Committee's proposals, the programme will offer assistance to each and every person employed for more than 12 months, and will seek to identify in discussion with each individual concerned his or her particular needs and a practical way of meeting them. We have already tested this in nine areas around the country. Indeed, as my hon. Friend the Member for Lewisham, West (Mr. Maples) said, that was a good way of trying out the practicability of our proposal. We are hopeful that the restart programme will offer in the next nine months personal help to some 1·25 million people registered as long-term unemployed.
There has been some criticism about the jobs being offered. We have identified eight categories of opportunities that we can offer to those whom we approach. The full range is set out in our "Action for Jobs" leaflet. It is no good the hon. Member for Newham, North-East doing the knocking job that he tried to do at one point — before agreeing that he supported it, after all — by talking about the number of jobs in which people were directly placed. We are talking about placing people in jobs with private employers, placing them directly in jobs in the community programme and placing them in jobs clubs, which have a high success rate, about placing people in training, and in the enterprise allowance scheme, and about people taking advantage of the jobstart allowance.
I believe that this ambitious programme, unique in its scale of comprehensiveness, is an answer to many of the pleas that have come from both sides of the House this evening to have another go at the problem of the long-term unemployed.
The hon. Gentleman made references to the alternative that he would put forward. I have to say to the SDP and to the Labour spokesmen that, given that the Select Committee has revised its proposals in response to our reactions, they might well examine their own policies. The Labour party in particular relied heavily on the Select


Committee proposal to justify its 1 million jobs claim. It has always reacted with cynicism and some suspicion to our restart programme, talking about tea and sympathy.
The first report of the Select Committee emerged at a time when the Labour party was making promises about jobs but had not, as it still has not, any clear policies. This was seized upon by the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley) in his speech on the Budget as an explanation. Professor Griffiths, it is claimed, shows that Government policies would reduce unemployment by the same amount, although over a little longer time. The same model says that our policy will reduce unemployment to a similar level a year later and that the Labour party's policies will push up inflation to three to five times higher in the next five years and increase the marginal tax burden by nearly one third.

Mr. Prescott: How much—what is the inflation rate?

Mr. Kenneth Clarke: It is three to five times higher—[Interruption.] If the hon. Gentleman is going to rely on Professor Griffiths' analysis, I rather welcome that.
I would like to know what the hon. Gentleman and his hon. Friends mean by the commitment that they keep giving, somewhat cynically, about the extent to which they have policies that would reduce unemployment—claims that are easily made to deceive those who hear them. One has to be clear about this. Two claims are made by the Labour party. One is that it will create 1 million new jobs. The other is that it will reduce unemployment by 1 million. The two are clearly different and they amount to quite different figures.
As the hon. Member for Kingston upon Hull, East knows, the Government have presided over the creation of 1 million additional new jobs since spring 1983, but demography means that unemployment remains high. The available labour force grew by 500,000 in 1984 alone. What Labour spokesmen plainly do not understand is the difference between the two claims and they use both formulations with reckless abandon. The fact that they keep changing shows that it is a bogus, irresponsible claim and in my opinion a cheat on the unemployed waiting for their share of economic recovery.
I tried to bring this out last week with the shadow Chancellor. I do not think the "Dear Roy, Dear Clarke," exchange will ever be published as a example of great literature, but it was an example of prevarication and bombast, something of which the right hon. Member for Sparkbrook was accusing the Prime Minister earlier today. Let me explain what lies behind this so that Labour can clarify its policies. I want to give some quotations of what has been said by shadow Cabinet members in the course of the last six months when they have repeatedly made this kind of claim. The hon. Member for Kingston upon Hull, East, in the Daily Telegraph of 14 August 1985, was quoted as having said,
Altogether we can create 1,400,000 jobs at a cost of £3,800 million".
That seems to bear no relation to current claims. Secondly, the right hon. Member for Islwyn (Mr. Kinnock), the leader of the Labour party, is reported in the Municipal Journal of 7 February 1986 as saying——

Mr. Leighton: On a point of order, Mr. Deputy Speaker. Is the debate not about the report of the Select Committee, not a knockabout in regard to the deputy leader of the Labour party?

Mr. Deputy Speaker (Mr. Ernest Armstrong): I will decide whether the right hon. and learned Gentleman is out of order.

Mr. Clarke: The hon. Member for Kingston upon Hull, East took 20 of his 40 minutes bashing the Government. I am also referring to claims that are based, as the Budget speech of the right hon. Member for Sparkbrook shows, on this Select Committee report, which was clutched by the Labour party as a drowning man clutches a straw when it had already made these commitments to new jobs, but had no idea how to create them.
I am sure that people will want to be reminded of what the right hon. Member for Islwyn said on 7 February. He said:
When we form the next Government our first priority will be jobs. We are going to work to generate one million in the first two years".
That was the same occasion on which the hon. Member for Kingston upon Hull, East said in the same journal:
How did we get this promise of one million jobs? Who worked on the programme? Promises such as these simply label us with targets we cannot achieve and expose our credibility".
Then we had the Budget speech in which the right hon. Member for Sparkbrook claimed, in what was the only detailed analysis of the policy that we have had—and this is to be found at column 310 of Hansard, 19 March —that 750,000 came from the first report of the Select Committee. On went the right hon. Member for Kingston upon Hull, East. He said the next day:
My right hon. Friend the Member for Sparkbrook pointed out how one million jobs could come in two years." —
[Official Report, 20 March 1986; Vol. 94 c. 448.]
This was repeated by the right hon. Member for Sparkbrook to the Union of Shop, Distributive and Allied Workers conference on 28 April when he said:
This programme will produce one million jobs in something like two years".
Today the leader of the Labour party has been speaking in Jersey—he has made a speech of which I have a copy — and he has altered the promise again. He said:
By using the money that Nigel Lawson would fritter away in tax cuts and by putting it to productive use we can and will gain a million new jobs in our first years in office".
As I have made clear, a million new jobs does not solve unemployment. As I understood the hon. Member for Kingston upon Hull, East earlier today, he committed himself again to the creation of 1 million jobs, and he admitted that would still leave 3 million unemployed. The fact is that the creation of those new jobs is merely matching what the Government have achieved. We are taking steps to try to speed up the process.
The claims of the Labour party are imprecise and insecure and do not amount to a row of beans. There is no solid policy behind them. I will take the hon. Gentleman's final words and go away and work on them. It seems that Professor Griffiths of University College is now the bedrock of Labour policy. I look forward to exposing——
The debate having continued for three hours, MR. DEPUTY SPEAKER interrupted the proceedings, pursuant to the Resolution [8 March].
Question deferred, pursuant to paragraph (2)(c) of Standing Order No. 19 (Consideration of Estimates).

ESTIMATES, 1986–87

Class IX, Housing

Housing and Environmental Services

[Relevant documents: Third and fourth reports of the Environment Committee, House of Commons, papers 341 (1985–86) and 356 (1985–86).]

Motion made, and Question proposed,
That a further sum, not exceeding £1,010,095,000, be granted to Her Majesty out of the Consolidated Fund to defray the charges which will come in course of payment during the year ending on 31st March 1987 for expenditure by the Department of the Environment on Housing, as set out in House of Commons Papers No. 284-IX.— — [Sir George Young.]

Mr. Deputy Speaker (Mr. Ernest Armstrong): With this it will be convenient to discuss the motions relating to the following Estimates: Class X,
That a further sum, not exceeding £5,820,177,000, be granted to Her Majesty out of the Consolidated Fund to defray the charges which will come in course of payment during the year ending on 31st March 1987 for expenditure by the Department of the Environment on Other Environmental Services, as set out in House of Commons Paper No. 284-X.

Class XX, Vote 18

That in respect of Class XX, Vote 18, for expenditure by the Property Services Agency of the Department of the Environment on acquisitions, public building work, accommodation services, administration and certain other services for civil purposes in the United Kingdom, the balance to be surrendered to the Consolidated Fund he £171,101,000.

Sir Hugh Rossi: This is the third time that the Select Committee on the Environment has reported on the Main Estimates of the Department of the Environment and the Property Services Agency, and the third occasion upon which the reports have been debated. As on previous occasions, the Committee has examined all the Estimates concerned, except defence accommodation, and is in general satisfied with the justification given for the Estimates. However, it has selected particular matters to which it believes the attention of the House should he drawn before Supply is voted. We inquired into the relevant sections of the public expenditure White Paper as well as the Estimates themselves.
There are two motions on the Order Paper in my name for reductions in two sub-heads. Depending upon what my hon. Friend the Minister says, I am prepared to press them to a Division at the end of the debate. They do not necessarily involve the most important subjects in our report, but, as the House knows, our conventions governing the Vote of Supply allow us to propose reductions, but not increases. A number of our past recommendations have been accepted by the Department, for which we are grateful, and by the PSA. Those are acknowledged in the appropriate places in our reports, and some of them are listed in paragraph 3 of the report on the Department of Environment's Main Estimates.
The two reports deal with some new subjects, but also explore further subjects upon which we have reported in the past. It is not to be expected that major subjects such


as the maintenance of the country's housing stock can be disposed of in a single year, so we make no apology for returning to such matters.
The first subject that I wish to raise is on page vii, paragraphs 5 to 8, of the third report on the main Estimates, and relates to housing mobility. Under the national mobility scheme, local authorities agreed to make available 1 per cent. of their lettings to people moving into their areas from other parts of the country. The result so far has been pathetically small—only 6,000 houses were successfully released under the scheme in 1984–85. We have previously made proposals for improving the scheme and we make fresh proposals in our report. I hope that they will be acted upon.
The scheme would help the mobility of the unemployed by assisting them to move into areas where jobs might be available. The root difficulty may be local authority reluctance to provide accommodation for new arrivals because they want to concentrate on those on their housing waiting lists. That is understandable, but more should be done to increase the mobility of labour. Perhaps my right hon. Friend the Secretary of State for Employment should take an active interest in this matter and discuss it with environment Ministers. I hope that my hon. Friend the Minister will respond to the debate more positively and less defensively than he has in the past—reluctant though he may be to upset local authorities. There is little point in setting up a national mobility scheme unless he is prepared to see it work. If it is defective, it should be replaced by a better scheme.
My next subject, dog and game licences, is referred to on page viii, paragraphs 9 to 12, and is becoming a hardy perennial. The Government are asking the House for £3·87 million to pay the Post Office to issue licences that bring in only £900,000 in revenue. That is nonsense, which is why I have tabled a motion that the House should not vote the £3·87 million.
Successive Governments have dithered about this matter since 1974. I recall tabling a new clause to the Control of Pollution Bill in that year, asking for changes in the system of control and protection of dogs. That led to the setting up of a working party which reported in 1976, and which made many recommendations that were widely welcomed. However, there is still no sense in the current system. When taking evidence we found that an overwhelming majority of people would prefer money to be spent on a dog warden service at local level. There is a need to collect strays and most of us, whether or not dog owners, want dogs to be kept under reasonable control in public places and the pavements in towns to he kept clean.
The Government appear to be making unnecessarily heavy weather of this issue. It is very controversial, but it cannot be ignored for ever. It is absolute nonsense to pay the Post Office more than £3 million a year simply to push pieces of paper across counters to half of the dog owners in this country—the other half not bothering to take out licences, and there being no prosecution for those who fail to do so. The law is a dead letter. We are spending a large sum that could be put to better use. I know that my local hospitals need kidney machines, and that £3·87 million would provide quite a few of those. We should not waste that money.

Mr. Richard Alexander: Does the position that my hon. Friend describe mean that those who refuse to take out dog licences, and are therefore acting illegally, are saving the country money?

Sir Hugh Rossi: That is the strange position in which we find ourselves. One recommendation could be that all dog owners should break the law and not buy licences, thereby saving the country almost £4 million. I know that my hon. Friend the Minister will be appalled that such a suggestion should come from these Benches, but illegality would not be necessary if only he would act.

Mr. Kenneth Hind: If a law is effectively unenforceable, does that not make the law look an ass and undermine the basic fabric and authority of this House? Is it not about time that we tackled the problem once and for all?

Sir Hugh Rossi: I am grateful to my hon. Friend for reinforcing my words with such eloquence.

Mr. Norman Miscampbell: The House should remember that there is a considerable body of opinion that dogs should be properly licensed and that simply to abandon licences would cause chaos in our streets. A proper dog licence, politically difficult though it may be, might be a better and more acceptable alternative.

Sir Hugh Rossi: As the House is no doubt aware, in Northern Ireland a higher fee is paid for a licence and the money is devoted to a proper system of dog wardens, to the benefit of both the general public and the dogs. Indeed, we have recommended that course in our report, and the Government should address themselves to it. If they feel that some form of dog licence is necessary, they should ask local authorities to operate the system because they know the amount of control that is needed in their areas. In some areas a system of control is more necessary than in others. That matter was suggested by the working group nearly nine years ago, yet today we are still discussing it and no progress has been made. The fault does not rest simply with this Government. Previous Administration have also fought shy of tackling this problem, probably because there are many dog owners and it was feared that they may be offended in the process.
1 would like to consider briefly the homeloans scheme which was introduced in 1978. That scheme had the commendable objectivity of encouraging home ownership for first-time buyers. Unfortunately, the sum which the scheme provides — £110 plus a £600 loan — has never been updated and has remained the same for eight years. That is now quite derisory. The Government should either make the scheme more attractive and advertise it, so that first time buyers know that it exists, or wind it up. The scheme seems to be nonsense.
The scheme is also a compromise. The original scheme proposed from the Opposition Benches in 1978 was a pound for a pound grant scheme to first-time buyers with a cut-off point at £3,500. However, the Government in 1978, stampeded somewhat by that suggestion before a general election, brought in the present mouse of a scheme, which has been a failure. I hope that my right hon. and hon. Friends will consider whether home ownership is now so popular that this kind of incentive may no longer be required since 62 per cent. of people currently own their own homes. If so, perhaps the scheme should be disposed of and the money allocated elsewhere.
The most important matter dealt with in the report on the Department of the Environment's Main Estimates is housing maintenance. Unfortunately, up-to-date information on the state of the housing stock is lacking. There has been no progress on that since the housing condition survey in 1981. However, updating the figures in the report, some £40 billion needs to be spent on repairs and renovations.
The money spent at present is doing little more than preventing the backlog of maintenance from growing. We should not delude ourselves over this matter. A firm action programme is needed. When we took evidence, it seemed as though the Department was inclined to shelter behind the fact that up-to-date information from the 1986 house condition survey must also be available. However, we know that that information will not be available for another two years. That is rather a long time to wait when it is already accepted that a vast sum of money needs to be spent.
We have therefore made a modest suggestion that steps should be taken to have the preliminary results of the 1986 house condition survey available not in two years' time but in nine months. At the very least, I hope that my hon. Friend the Minister will be able to assure us that that information will be available.

Mr. Chris Smith: Before the hon. Member for Hornsey and Wood Green (Sir H. Rossi) moves away from the report on the Main Estimates, may I draw his attention not to the main body of the report but to appendix 4 on page 34 and a supplementary note provided after the Committee had concluded its deliberations about the housing associations' construction programme? Is it not alarming that the figures show that, for scheme approvals and dwelling starts in the current financial year, there has been a drop of more than 20 per cent. in both those categories for housing associations? Should we not draw that fact to the attention of the House and ask the Government hard questions about those cuts in housing association provision?

Sir Hugh Rossi: No doubt my hon. Friend the Minister has heard the hon. Gentleman's intervention and will deal with his points in the course of his reply. We must bear in mind that other figures have been put about concerning the excess of accommodation in relation to households. The Opposition produced a Green Paper many years ago when they were in government which stated that the problem was local and that there was a need for public sector housing for specialist groups such as the disabled and sheltered housing for the elderly. No doubt the Minister has more facts and figures at his disposal about these matters and I hope that he will be able to satisfy the hon. Member for Islington, South and Finsbury (Mr. Smith).

Mr. David Winnick: The hon. Gentleman said that the provision of public sector housing should be for specialist groups. Whatever may have been the position in 1977, would he not agree that in the large cities — for example, London — many people, even on average earnings, simply cannot begin to buy a place because of house prices? That does not simply apply to London; the hon. Member for Hornsey and Wood Green (Sir H. Rossi) must be aware of the position in his own constituency. Does that not strengthen the argument that

many people — not just the poor — desperately need public sector accommodation, without which they will not be able to resolve their housing difficulties?

Sir Hugh Rossi: I accept that many families, especially in the inner cities, cannot begin to contemplate the purchase of their own house, although there are many valuable schemes, such as equity sharing, which have been produced to assist as many groups as possible.
Part of the inner-city problem— I am sure that the hon. Member for Walsall, North (Mr. Winnick) will not welcome this argument — is due to the fact that the private rented sector has died. We can look to certain legislation which has created an artificial shortage in that area and which has exacerbated the position for many families, especially when one considers that at one time the majority of housing provision was in the private rented sector. That has been killed off by legislation. We must take a much broader view of the position than that taken by the hon. Member for Walsall, North if we are considering an all-round solution to the problem.

Mr. Robert B. Jones: Is not part of the explanation for that the commitment or lack of commitment of local authorities? Is my hon. Friend aware that Wandsworth council, which has many inner-city problems, has increased its owner-occupation rate from 27 per cent. to 53 per cent. since the Conservatives captured control of the council in 1978? That has been achieved with the assistance of many imaginative schemes which could be copied by the local authorities controlled by the Opposition which are so adamantly against home ownership.

Sir Hugh Rossi: As always, my hon. Friend is well informed and, as usual, he is correct.
I would like to consider the Select Committee on the Environment's fourth report on the PSA's Main Estimates for 1986–87. In that report we have made a number of recommendations about the PSA system of accounting and the way in which money is made available to the agency by the Treasury. I should like to draw attention to three points.
First, we should like some hard evidence about whether the property repayment services system is producing economies. For three years, the PSA has been charging Departments for the accommodation they occupied. A vast amount of paper work is involved but there does not appear to be much evidence that the new system has resulted in more economy in the use of accommodation. What is the point of a reform of this magnitude if the results are not being monitored? They cannot be being monitored because nobody can give us the information that we want. Are we expected to believe in the PRSS as an act of faith?
Secondly, the PSA should have a proper set of commercial accounts. It would like to follow a policy of buying and building more office accommodation and relying less on the expensive alternative of leasing it. The agency is inhibited from doing that because the cost of capital investment is charged in Government accounts in the year in which it is incurred. From the point of view of annuality, therefore, it is easier to pay a smaller yearly rent than to pay for the freehold in one year.
All commercial properties are now subject to stringent rent review clauses. Gone are the days when one could get a 21-year lease on a fixed rent. Rents now have to be


reviewed every two or three years and in no time at all they exceed what would have been the cost of buying the freehold in the first place. That is a ridiculous situation into which the Government should not have got themselves and it is substantially the result of the Treasury convention of annuality. Environment Ministers should speak to their opposite numbers in the Treasury to see whether their accountants, whose ingenuity is no doubt unlimited, can find a means of spreading the cost over the lifetime of the asset, as any commercial undertaking would for the purposes of its accounts.
Thirdly, freeholds come on the market on favourable terms at very short notice. It is silly that the PSA is unable to buy freeholds when they suddenly become available. It should have the money to buy them, but the Treasury refuses to make money available on a contingency basis. To anybody in the commercial world, that is bad business. We see no reason why the Government should not conduct themselves on more commercial lines for the benefit of taxpayers.

Mr. Miscampbell: It might be useful for the Government to explain at the same time why they will not borrow from the commercial market if they do not want to produce the money themselves. Although they could buy the freehold of a property which they will need in a year or two at the most convenient terms, they refuse adamantly to go to the commercial market which is running with money and would lend to them. That would be a far cheaper approach.

Sir Hugh Rossi: My hon. and learned Friend will know that there is a glimmer of hope. We were told in evidence that consultants have been hired to advise on these matters. Their remit should be made as wide as possible to cover the issues that my hon. and learned Friend mentioned and their report should be expedited. Perhaps a Treasury Minister rather than my hon. Friend the Parliamentary Under-Secretary of State should be present to answer today.
One of the Select Committee's major worries concerns acquisitions and new works. They are dealt with in paragraphs 22 to 32 of the report. The PSA's original estimates of the cost of the new works have turned out to be wildly wrong in a significant number of cases. I shall give only two of the many examples that were given in evidence. The original estimate for a building for the Foreign and Commonwealth Office is being exceeded by 114 per cent. and the estimate for a court for the Lord Chancellor's Department is being exceeded by 77 per cent. Part of the fault lies with the commissioning Departments, which chop and change their requirements and specifications. Each time they do that, the cost of the project increases. There should be firmer control over commissioning Departments and the changes that they are permitted to make. Part of the blame, however, attaches to the PSA for inaccurate estimates. We are glad that the agency proposes to carry out a study into its estimating performance.
As an expression of the Committee's disquiet, however, I have tabled a motion which would reduce that sub-head of expenditure by £20 million. I hope that my hon. Friend's reply will obviate the need for me to move it formally.
There is an alarming backlog of maintenance on the agency's Civil Estimate, amounting to £100 million, which seems to be growing. We all know that neglected maintenance leads to more expensive hills. The point has been reached at which the Treasury must make increased resources available, as the other sub-heads of the agency's budget have been bled white.
I hope that we can hear satisfactory replies to the issues that I have raised. In view of the criticisms that we found it necessary to make in our report on the PSA's Estimates, the Committee has it in mind to carry out a full inquiry into the PSA during the next Session.

Mr. Allan Roberts: I should like to put on record the fact that, as well as speaking from the Front Bench on behalf of the Opposition, I am a member of the Environment Select Committee, and I am pleased to speak after the hon. Member for Hornsey and Wood Green (Sir H. Rossi). I should like to pay a compliment to him as he chairs our Committee adeptly and skilfully. He guides us effectively, especially when it comes to choosing subjects on which we can produce reports that have all-party support. I pay that tribute, even if I disagree with some of what he said today. This debate is a little more political than our discussions in Committee.
I shall concentrate on the Select Committee's report on the Department of the Environment's Main Estimates. My hon. Friend the Member for Blackburn (Mr. Straw) will address himself later to the report on the PSA. I want to mention gipsy sites, the Liverpool garden festival, which affects me in terms of constituency interest, dogs, help to first-time buyers, home owners, housing mobility, housing maintenance and the report's references to the traditional urban programme.
The Environment Select Committee recently followed the hippy trail through the west country on its present inquiry into ancient monuments and historic buildings. Many of the local authorities which complained about the the peace convoy and said that they needed stronger laws of trespass to deal with it would have had the powers that they wanted if they had provided gipsy sites under existing legislation. If they had provided such camps, they would have been able to prevent travellers such as the peace convoy from squatting on land. Although there are 469 housing authorities, there are only 232 sites. The Select Committee welcomed the Government memorandum, the circular that has gone out from the Department of the Environment, but urged the Government to review the legislation and put strength in it so that local authorities which are not providing sites will have to provide them.

Mr. John Mark Taylor: I should like to take the hon. Gentleman a little further on the matter of caravan sites and the so-called peace convoy. Is he honestly endeavouring to tell the House that if all the local authorities followed to the letter the law about the registration of necessary sites for itinerant people all the malpractice and anti-social behaviour of this so-called peace convoy would go away, and that the members of that convoy would settle down happily in any such designated sites?

Mr. Roberts: I am speaking about the laws that local authorities need to move travellers on. The peace convoy comes within the definition of the legislation on gipsy sites.


The local authorities would have had the stronger powers that they seek under the law of trespass to move those people on if they had provided sites. I do not want to spend all my time discussing this issue because I should like to move to other points.

Mr. Robert B. Jones: The hon. Gentleman has spoken about designation, and that would certainly give local authorities more powers in respect of public land. The point that arose in the west country related to private land. The law was perfectly clear but getting rid of these people caused the farmer great frustration and cost. That is the point that worries everybody.

Mr. Roberts: I am well aware of the things that worry people because we met worried people on our journeys. Local authorities have powers to move on travellers if sites are provided, but only 232 local authorities have provided sites. As the Select Committee said, this leaves some 35 per cent. of gipsies and people who travel—leaving aside the peace convoy—without sites on which they can legally park. Something needs to be done about that before we become critical of travellers who trespass.
I am pleased at the way that the Liverpool garden festival turned out. The Select Committee highlights that the festival cost £14·822 million to design and construct and £5·447 million to run. That is a total of over £20 million. The total revenue was £6·398 million, and that makes it look as if there was a loss on the festival of over £13 million. However, if we take account of the contributions of £883,000 and the £5 million value of the exhibition site and the buildings that were left, the loss is reduced to about £8 million.
Partly at my request, the Select Committee visited the site. That visit was a catalyst that got people moving. Our inquiries were informal and unofficial and as a result the development corporation was able to bring in a private company, Transworld, and public sector involvement through the Merseyside development corporation. That has transformed what was to be a one-off international garden site into a permanent facility for the people of Merseyside. Transworld will invest £5·5 million and this year it has already spent £1 million on maintaining the facility. The company is investing money to turn the area into a major theme park.
But for public expenditure and effort and the visit of the Select Committee on the Environment and this private sector partner, a formerly derelict dockland area would not have been transformed into a permanent benefit for the people of Merseyside. It is a pity that a lot of other development corporation land is still empty, despite having its negative value removed. Developers and private sector firms are not coming in, and perhaps the lesson is that a bit more public expenditure is necessary as a catalyst.
The Committee recommends that the present dog licence should be abolished and that consideration should be given to empowering local authorities to raise revenue by the issue of dog licences at appropriate fees to cover the cost of a dog service. There would be certain exemptions. As the Select Committee points out, there are 5 million dogs in Britain. I think they are all in Bootle. When I leave my front door in Bootle it is like entering a safari park. I was in the local supermarket the other day—not the Coop—and a dog came in and peed on the South African oranges. One of my constituents said, "What will you do about that, Mr. Roberts?" I said, "I will buy Australian."
We need action to deal with the problem of dogs roaming in the streets and fouling the pavements. The dog licence is an insult because it is too expensive to collect. Local authorities should be given responsibility and power to deal with the problem and the Government should stop collecting the licence money. Local authorities could easily impose a heavy licence fee and use the money to run dog warden services. A service like that would be appreciated not only by people such as I who are not fond of dogs. Dog lovers would appreciate it as well. That is because it does dogs no good to roam neglected as they do.
The hon. Member for Hornsey and Wood Green called the home loans scheme a Labour Government's miserable little scheme introduced just before a general election. It is better than any scheme that this Government have introduced. The home loans scheme that the last Labour Government introduced in 1978 was a fair attempt to enable first-time buyers who had saved some money to receive grants and loans from the public purse. That was an attempt to help create genuine owner-occupation. The scheme should be extended and developed and we shall do that when we form the next Government.
We believe in owner-occupation and especially want to help first-time buyers. If the Government ask where the money will come from, let them look at the latest Estimate for 1985–86 which puts the total tax relief for qualifying interest on loans for the purchase or improvement of owner occupied property at £4·750 million. I am not suggesting that we should abolish income tax relief for owner-occupiers, but there is nothing wrong with redistributing that money.
A basic 29 per cent. rate taxpayer with a 25-year repayment mortgage subject to MIRAS and an interest rate of 11 per cent. in the first year and a £12,000 mortgage receives £383 in tax relief per year. A person with a £30.000 mortgage, the maximum amount for which income tax relief is obtainable, receives £957. That is wrong. It is a system of subsidising owner-occupation that is based on that old English principle that the richer you are the more help you need with your housing. We want to see first-time buyers, the lower paid and house purchasers in the lower price range given more help by redistribution of the money.

Mr. Robert B. Jones: rose——

Mr. Roberts: I will not give way because lots of other hon. Members wish to speak.
I am not surprised that the hon. Member for Hornsey and Wood Green and the Select Committee on the Environment said:
We understand that the Minister has been unsuccessful in persuading local authorities to agree to
provide a certain percentage of their housing stock to allocate to people coming in from other local authorities. I regret that, but it is not surprising because if local authorities do not have the houses to allocate to their own people they will be understandably reluctant to allocate them to others.
The reason for the shortage of housing is that the public rented sector has declined under this Government because it is being sold off and also because hardly any new council houses are being built. That is why the mobility scheme is not working and why local authorities are reluctant to give houses to people coming in from other areas. They have no houses to give to people on their own waiting lists, homeless people indigenous to their areas.
In 1981 house building fell to its lowest level since the 1920s. Under this Government public sector house building has been slashed. Fewer than 40,000 new council houses were started in 1984 and fewer still in 1985 — about 70 per cent. down on 1978. Taking public and private house building together, homes started under the Government are 37 per cent. below the number started under the previous Labour Government. The claim that the private sector can make up the lack of new council houses is clearly wrong. Over 500,000 extra homes would have been built by last year if Labour's house building plans had been maintained.
The report of the Select Committee on the Environment on house maintenance is a damning indictment of the Government's housing policy. Because it is an all-party Committee, it is in softly, softly language, but, none the less, it is an indictment. Our last report said:
It seems certain that there is a very large backlog of housing maintenance at the present day and, against that background, it seems to us imperative that the available resources are appropriately distributed between the private and public sectors.
That report talked about £30 billion — £40 billion at present day prices — being needed to maintain our housing stock. It goes on:
According to the Department's recent enquiry into the state of the public sector stock, some 3—8 million dwellings out of a total of 4—6 million require some attention and the total capital expenditure required is some £19 billion ie an average of about £4,000 a dwelling.
The Select Committee concludes:
We are concerned—that is putting it mildly—about the state of repair of the housing stock. Neglected maintenance is not merely postponed but gives rise to the need for even more maintenance later on.
Then comes the prediction of the return of the bulldozer—
Some property, particularly in the public sector, may be near the point where replacement rather than renovation becomes the only realistic but more, much more expensive option.
The crisis highlighted by the Select Committee is a major one, growing into one of 1945 proportions. One third of today's homes were built before 1919. The worst conditions are in the private rented sector which Conservative Members want to revive. Nearly half of all unfit homes are owner-occupied. In England and Wales 1·25 million homes are unfit for human habitation and I million lack one or more basic amenities such as an inside toilet. In the United Kingdom 2·5 million are seriously affected by damp; 3 million require immediate repairs, each costing £2,500 or more; and 1·5 million have serious design defects.

Mr. Robert B. Jones: The hon. Gentleman is clearly implying that a great deal of money should be spent on this problem. He has already told us that he believes in altering the tax relief system. At what level would tax relief be withdrawn by an incoming Labour Government?

Mr. Roberts: At the high rates.
The backlog of repairs and the blame for the current housing crisis that the Select Committee highlights lies firmly with the Government. They have repeatedly cut the budgets for housing expenditure. Indeed, since 1979 housing has borne the brunt of public spending cuts, with expenditure cut by more than a half, taking account of inflation. As a result, the proportion of its national income that the United Kingdom spends on housing is far smaller

than that of any other EEC country. That is the housing crisis as highlighted clearly by the Select Committee's report.
The Select Committee received from the previous Secretary of State for the Environment, now the Secretary of State for Education and Science, a note on urban policy headed "Traditional Urban Programme", which is optimistic. But we must realise that the urban programme is not an urban policy. It is financially, managerially and politically marginal to urban government. In 1985–86 the urban programme comprises only £2 in every £10,000 of total planned Government spending. The base urban programme allocation for some programme authorities is less than 2 per cent. of their revenue budget.
I welcome every penny of urban programme money that the Government give, especially if it comes to Bootle, but we must put it in perspective. Total urban aid from 1981 through to 1987 is £1,910 million. Government cuts in rate support grant to local authorities were nearly eight times more than that—£8,060 million. The only way to solve the urban problems of our inner cities with which local authorities are having to battle is not through the urban aid grant but through the mainstream programmes of local authorities which are highlighted in the report, such as housing and so on, about which the Select Committee is concerned. The only way to solve the problems is by increasing Government expenditure, not reducing it. I regret that the Select Committee cannot table any resolutions to increase expenditure rather than reduce it. If that were possible, that is what the Opposition would be doing.

Mr. Robert B. Jones: I have greatly enjoyed being on the Select Committee on the Environment for the past two and a half years. Now that I am due to leave it I should like to take this opportunity to say that I very much enjoyed co-operating with hon. Members from both sides of the House during the production of our reports, and, in particular, serving under the chairmanship of my hon. Friend the Member for Hornsey and Wood Green (Sir H. Rossi), one of the outstanding Chairmen in the House, who has led us through a series of most interesting subjects, not the least of which are the two that we are considering today.
If I have one main regret about leaving the Committee, it is that I shall not be able to serve on the Committee during its detailed consideration of the Property Services Agency in the coming year. There is a major job to be done in that area.
I want to refer in particular to two recommendations which are dealt with in the Select Committee's report and I shall take them, if I may, in reverse order. Recommendation 32 relates to the acquisition of freeholds. My hon. Friend referred to that in his speech. I find it baffling, and I know that other members of the Committee did too, that the policy on the acquisition of freeholds is not a calculated one on the basis of the facts available to the PSA, but is an ad hoc policy, based entirely on whether there happens to be any money in the kitty at the time. It cannot be right that it should wait until the last weeks of a financial year, knowing, as many Departments do, that they have to blow the money or hand it back in order to develop its property policy. It should have a clear set of criteria by which it decides whether to purchase and there should be a fund within the PSA estimates which


entitles it to acquire far more buildings than it has at present. There is no doubt whatever, given the recent history of property prices, particularly in the cities and the south-east, that freeholds are a good buy.
Recommendation 31 refers to the central point, if I may call it that, of the report-the competence of the PSA in dealing with its programmes and projects. I took up two particular projects in some detail during cross-questioning of witnesses from the Department and I want to refer in particular to them.
The first is the Hanslope park scheme. That is the uprating of an engineering service in a Foreign and Commonwealth Office establishment. That has overrun by £1,500,000 on an original cost of £1·1 million. That is an astronomic increase. Some increases are because of things that have happened in the meantime, which have resulted in extras being added in. I agree with my hon. Friend that it is most unwise to change the specification to provide more or different accommodation or whatever, because that does not give good value for money in terms of purchasing construction work in the private sector, but it is even more illogical that the whole building had to be redesigned to bring the engineering services up to current safety standards. That was responsible for £630,000 —40 per cent.—of the overrun. The reason for that was that it was very late in the day when the Department decided to consult the laboratory of the Government chemist. If it was important to consult the laboratory of the Government chemist about the design, surely the proper time to consult was at the beginning of the project, not halfway through so that it resulted in a significant overrun. When I questioned the witnesses from my hon. Friend the Minister's Department they could offer no real assurance that it would not happen again. Indeed, they seemed thoroughly complacent about their performance on this and other matters.
The second project is the Derby Crown courts. One would think that the Property Services Agency had some experience of courts. After all, it has dealt with them in a number of different parts of the country. It has overrun with monotonous frequency, but I am sure that in part it is due to the Lord Chancellor's Department revising its requirements. I hope that my hon. Friend will take up vigorously with the Lord Chancellor the point that he, too, should get things right at an early stage.
There are two other factors involved beside changing the specifications. In mid-1983, in the middle of the project, the Civil Service Catering Organisation changed its catering policy to include a coffee shop style of catering in some courts and provided a completely new brief. That cost the taxpayer an extra £41,000. Admittedly, that is small in terms of the total overrun of £2·7 million. That overrun relates to an original estimated cost of £2·9 million, almost as bad as the other example I gave.
The real villian of the piece was the PSA, which, on examination of the design, decided that it was necessary to make improvements, particularly in the fire escape routes from the dining and jury circulation areas. The consequent redesign was more expensive. That was £696,000 out of the total £2·7 million overrun. What happened? It is curious, but the fire authority was not consulted until late in the project. I find that extraordinary and when I cross-questioned witnesses from the Minister's department they said:
The lesson we have learned from this is that it is not good enough to devolve responsibilities for designing something as

complex as a court to our regional organisation simply on the basis that they have the requisite numbers of architects or engineers. One must make a more detailed inquiry as to the skill and experience of these architects and engineers that we now have.
Anyone who has any experience of the private sector in dealing with construction projects would have known perfectly well that that was the case. Anyone in a private sector company who placed an order with a company for a design of a building without having investigated whether it was capable of carrying out the project would deserve to be sacked on the spot. I ask my hon. Friend the Minister to say what disciplinary action has been taken against the civil servants in the PSA whose incompetence cost the taxpayer £700,000 on one project alone.
Those are just two examples out of a whole list that the Committee examined. We have examined similar examples in previous years and I am grateful to my hon. Friend the Member for Hornsey and Wood Green for having secured this debate. It is about time that the scandals came to public attention and time that the Minister really took control of the PSA to make sure that we do not have the same sad story next year. If we do, it will not only be the Select Committee on the Environment which will be seeking a debate in the House on the PSA estimates; it would rightly and properly be something being sought by other Select Committees, by Opposition Members and by my hon Friends.
I shall turn to a number of items in the Department of the Environment's main heading. Some of them have been touched on by the hon. Member for Bootle (Mr. Roberts). I simply wish to put a somewhat contrary view, which will not surprise him, on one or two points. First, I shall deal with gipsy sites. My hon. Friend the Member for Hornsey and Wood Green touched on the points on which we had cross-questioned the Department of the Environment. Of course, the letter is appended to the report.
Those of us who have constituencies which are on the fringe of urban areas know what the problem is. When an authority applies for designation saying that it has sufficient official sites to cater for the number of gipsies in the area, one may get an influx from all sorts of other neighbouring areas, especially if they had designation first. My hon. Friend the Minister responsible for planning and the designation of gipsy sites has tried to deal with applications on an inward-outward basis because that is the right way to do it. However, he is still sitting on the application for designation by Hertfordshire county council in respect of Dacorum borough council, which covers my constituency and part of the constituency of my hon. Friend the Member for Hertfordshire, South-West (Mr. Page).
In the middle of the Minister's consideration, one of the local Socialists in Berkhamsted challenged the consultation process in the courts. She was perfectly entitled to do that. Of course, it went out for further consultation and it has gone back to my hon. Friend for another examination. I think that he must make an urgent decision on this because we are suffering every bit as much as people in Somerset from influxes of caravans, or various sorts of people who camp out on the byways, tear up the hedgerows, chop down young oaks and cause a great deal of petty and serious crime in the area. Obviously one wishes to see proper arrangements for permanent housing and schooling for many of those families. However, I do not think that it is right for any local authority to be


required to cater for the sudden influxes that come from different parts of the country at any one time. I hope that my hon. Friend will convey those thoughts to the Minister responsible.
I want to refer to Vote 4 in passing. My hon. Friends on the Select Committee are aware of the fact that it was at my suggestion that the Select Committee did a one-day inquiry into the use and future of Hampton Court palace. It was a most interesting study, which provoked some interesting and quick decisions on the part of the Department of the Environment. Quick decisions are often welcome. Obviously, since that time the very sad events have taken place that led to the partial destruction of Hampton Court. We were all grateful to the Secretary of State for his assurance that funds would be made available for the reconstruction of Hampton Court. I simply want to ask my hon. Friend the Minister to assure us that we will not have any barmy modern architectural practices forced on to the beautiful Hampton Court palace and that it will be rebuilt properly in a combination of mediaeval, Tudor and Wren. I know that many people in that part of London are worried at a suggestion from an architect whose name I cannot remember——

Mr. John Mark Taylor: Mr. Chapman.

Mr. Jones: No, it was not my hon. Friend the Member for Chipping Barnet (Mr. Chapman). The architect suggested that the ruins should simply be glassed over as a monument to the destruction. That would be quite unacceptable.
I should like to refer briefly to Vote 3 referring to the Commission for the New Towns. It is the policy of the Government, one that I fully support, that assets of the Commission for the New Towns should be released into the private sector in order to allow funds to be made available for other capital projects. I think that there is some evidence that the commission is using that remit to try to extract outrageous sums on the non-trading side of the commission. I am not talking about the sale of factories and so on, but the sale of some of the social assets. For example, the centre for the blind in my own constituency is on a 99-year lease on a peppercorn rent. Therefore, it seems wholly unreasonable for the Commission for the New Towns to insist on market price if the trustees of the centre for the blind wish to purchase it. It has no value to the commission since it is on long lease with a peppercorn rent. I hope that my hon. Friend will look at that and other examples to see whether he could give revised instructions to the Commission for the New Towns to ensure that it has proper regard to the social obligations in constituencies such as mine, Welwyn, Hatfield, Stevenage, Crawley and other new towns where their own corporations have been wound up.
I have also worried considerably about the commission's attitude to the sports facilities that it owns. I must declare my interest, albeit it a non-pecuniary one, as president of the Dacorum sports council. We are worried that, as the commission owns some of our sports fields, it will be tempted to seek planning permission for housing development on that land to get the maximum capital gains for itself. That would not be consistent with the general policy that has existed in the area for many years, which is that we should try to have the maximum sporting facilities in the town.
Vote 6 deals with rate support grant which is always a contentious matter. My hon. Friend the Minister will be well aware that when we last debated RSG I did not support the Government in the Lobby because I felt that Hertfordshire was being particularly adversely treated. I do not wish to defend excesses in expenditure. It is striking that since the Conservative party lost control of the county council in 1985, the alliance, together with the Labour party, which together form the majority, have pushed through an increase in spending of 11 per cent. That is second only to Liberal-controlled Somerset as an increase in expenditure. My ratepayers and others in Hertfordshire are having to carry the can for that sort of excess.
My anxiety is that the RSG distribution is unfair. It seems fair to say that because my constituents and others are wealthier than average—our per capita income is about 10 per cent. greater than the national average—we should pay more. But the average ratepayer in Dacorum pays 41 per cent. more in rates than the national average, and that is unfair. That is because of the way in which rateable value is taken into account in distributing the money available. The sooner my hon. Friend presses on with the reforms that have been heralded in the rates Green Paper, the better it will be for areas such as mine.

Mr. Allan Roberts: Is the hon. Gentleman aware that the Green Paper envisages that the change to a poll tax will take the duration of five Parliaments? Does he really believe that the Government will do anything about it?

Mr. Jones: I sincerely hope that my hon. Friend the Minister will take note of the importance of having a community service charge, because that will be a much fairer way of distributing the cost of community services than the present rating system. I make no bones about the fact that I support that proposal. Indeed, I have said that vigorously in my constituency and received a large amount of mail from people who agree with my stand.
My point refers to the other half of the Green Paper, which deals with how RSG distribution would take place. I certainly welcome the division of RSG into two halves: a per capita half and a resources half. One anomaly in the present system, which I am sure my hon. Friend would not wish to get rid of, is the London discount. London is given a 25 per cent. discount on its rateable value because it is considered to be high. In all fairness, either that should apply to Hertfordshire, Surrey, Berkshire and other local authorities which surround London and also have high rateable values, or the London discount should be abolished. I leave it to my hon. Friend to decide which he thinks is fairer. Certainly it is most unfair that London enjoys a privilege that is not extended to other areas.
The hon. Member for Bootle made a most interesting speech on housing. Unfortunately, he did not go as far as we in the Conservative party might have liked as he did not let his cat entirely out of the hag. However, the front six whiskers of the cat were quite enough to frighten many of my constituents, who would find their mortage interest tax relief abolished because they pay higher rates of tax. I do not know whether the hon. Gentleman realises that a senior school teacher in my constituency married to a manual worker in one of the computer industries would easily fall into that bracket and would end up paying a great deal more in tax if the relief were altered.
The hon. Gentleman did not tell us — the Labour party must come clean on this—where the Labour party


would set the limit for tax relief. He said that it was reasonable that tax relief should be given on mortgage loans up to £12,000 but implied that it was wrong that it should apply to loans of £30,000. At which point between those two figures does the Labour party propose to cut relief? I have heard it said that £20,000 is the point at which the Labour party imagines tax relief should end. If so, many home owners in the south-east will be extremely hard hit.
Finally, housing is a changing area of public policy, and rightly so, because people's aspirations change. It is not many years since most people's expectation to rent gave way to an expectation, especially among young people, to own their home. I pay tribute to the Government for having liberated a large number of my constituents from their previous feelings that home ownership was not available to them. It is now.
If we are to progress on the housing policy front we need to see more local authorities following the example of Wandsworth, which is prepared to involve the private sector in work and to bring in capital from private development companies to produce much better houses in the areas where grim, awful, council estates previously stood. It is hardly surprising that the Conservative-controlled council there was triumphantly re-elected in May. It gives many people in Wandsworth a chance of something which every Opposition Member has — a home of their own. Because that is the rallying call of Conservatives in local and national government, I am pleased to be a supporter of the Government.

Mr. John Cartwright: I must be the first hon. Member to speak who is not a member of the Select Committee. I should like to offer my congratulations and thanks to it for the way in which it has examined these Estimates. I propose to select three issues to which it has referred in its helpful report.
First, I turn to the issue of the home loans scheme. As has been pointed out, the scheme began life in 1978 as the home purchase assistance scheme, and since then it has been virtually ignored by the Government. The financial limits are exactly the same as when the scheme was first introduced. Applicants who have saved for two years qualify for an interest-free loan of £600 and a grant of £110. However, since 1978 house prices have more than doubled and the Nationwide building society's housing price index which stood at 172 for the fourth quarter of 1978 shot up to 377 by the first quarter of 1986. Yet throughout that period the figures for the home loans scheme have not been increased by one penny piece, nor has the scheme been promoted seriously by the Government. As a result, it is hardly suprising that the number of applicants has decreased to only 3,000 a year. Indeed, it is surprising that as many as that know that the scheme exists.
At present, as the finance director of the Department of the Environment admitted to the Select Committee:
the repayment of loans exceeds the outgoings so there is a net income to the Exchequer from it.
In other words, we have the crazy position in which a Government finance scheme, designed to put money into the pockets of first-time home buyers, has become a nice little earner for the Government. The sums involved are paltry. That was underlined in the Select Committee's examination by its Chairman, the hon. Member for

Hornsey and Wood Green (Sir H. Rossi), who pointed out that the Government were spending £2·8 million on the home loans scheme and £3·8 million on dog licences. As he pointed out, if the Government scrapped dog licences, they could double the much needed help to first-time buyers.
The home loans scheme was designed to help genuine first-time buyers on modest incomes. People who already have a foot on the ladder, who have some inherited money or whose parents are prepared to give or lend the money for a deposit do not need such help. If the Government are as committed as they say that they are to extending home ownership, they must do more to help those young people struggling to pay rent or living with their parents while trying to save money to buy their first home. The scheme needs to be revamped. It should be limited to those on modest incomes, average earnings or below, who are saving to buy their own homes.
Rather than continue with the present arrangement of a loan grant, we should return to the original idea of matching grants so that the amount that people save will be matched pound for pound over a period of at least two years and up to a reasonable maximum figure. If the scheme were properly promoted and advertised, it could give a real incentive to young people to own their own homes. Much more important, it would bring home ownership within the reach of many young couples who are now denied it.
I move from a scheme about which little is known to an issue about which all too much is known — the condition of local council housing stock. Last November, the Department of the Environment published its famous report on the extent of dilapidation in local council housing. In summary, the report said that 3.836,000 dwellings, 84 per cent. of the council housing stock, were considered to require expenditure totalling £18·84 billion, at an average cost of £4,900 per dwelling. The estimate For local authority capital expenditure on renovation in 1985–86 was £1,150 million. That is only 6 per cent. of the money that needs to be spent, assuming that there is no further deterioration.
We all know that the condition of the housing stock is getting worse all the time. In its April 1985 report on capital expenditure controls in local government in England, the Audit Commission pointed out:
the total maintenance backlog will have been building up at the rate of at least £900 million a year at 1984 prices over the past several years".
That implies that our current level of spending for repairs in council housing has an impact of only around £250 million a year in improving the situation. In other words, the overall bill for housing repairs in the council sector may be coming down by as little as 1 per cent. a year. On present trends, this could mean that it will take us up to the end of the next century to bring all council housing up to acceptable standards.
Obviously, all these Estimates have a certain broad ball park element to them. We know that the Department of the Environment is conducting selective follow-up surveys to the 1985 exercise, and that in 1986 the housing condition survey will give us more accurate information about the state of the public sector and its housing. A clearer view of the trend to deterioration on the one hand and the counter trend in terms of maintenance and repairs on the other will be emerging over the next few years.
The underlying problem is clear, whatever the precise figures. The Select Committee said clearly and firmly in its report:
Neglected maintenance is not merely postponed but gives rise to the need for even more maintenance later on. Some property, particularly in the public sector, may be near the point where replacement rather than renovation becomes the only realistic but much more expensive option. Accurate information is important but the necessary decisions are urgent and should not be postponed while the proposed House Condition Survey follows its protracted course.
I strongly endorse the sense of urgency contained in that recommendation.
Those of us who represent a substantial number of council tenants know only too well what this past neglect means for council tenants and families. It means leaking roofs, decaying plaster, rotting window frames, flats running with damp and condensation, old fashioned, ineffective and expensive heating systems and all the rest that so reduces the quality of life for many families in council housing.
There is a wide agreement across the House that the Government have not given capital expenditure the priority that it deserves. Capital spending on housing has been cut by 60 per cent. since the Government came to power and we know that there are no plans to increase the amount being spent on housing. Even last year, when the then Secretary of State was reported to have won a famous victory in the annual public spending round, it turned out that the increase of £250 million for housing spending was a decrease of £185 million. This was a confidence trick achieved by creative accounting and a revision of the amount of capital receipts that local authorities were allowed to spend. If that was the scale of the victory achieved by a leading Cabinet wet, it is doubtful how much faith one can put in a Secretary of State who is reported as having started the annual spending round by reducing the figures for his Department.
There is a general view that we must put greater emphasis on capital spending and increase investment in our national infrastructure. In 1970, we spent 7 per cent. of our national product on public investment. Today, the figure is down to only 2 per cent. We must, at the very least, restore the share of capital spending to its 1979 level. That means a boost of about £2 billion to be concentrated on housing and roads.
Public expenditure is not enough. The Government hope to attract private finance into the local authority sector to assist in tackling a tremendous backlog of maintenance. In principle, I welcome that approach, but it has to be based on a genuine partnership between local authorities, financial institutions, developers, tenants and the local communities involved. It is not clear at this stage whether the Government have found the right mix, and it is doubtful whether a genuine impact can be made without both an increase in Government spending and significant incentives to encourage private investors to put their money into the restoration of council houses.
The Audit Commission pointed out that, although about £1 billion might be available to invest in council housing, the response in the local authorities has been
underwhelming to say the least.
The Audit Commission contrasts that lacklustre approach with the experience of north America where in cities such as Atlanta, Baltimore, Cleveland, Detroit, Minneapolis,

New York and even Washington DC there has been clear evidence that only with a productive partnership between public and private sectors can the problems of inner cities in particular be addressed. In its report of March 1986, the Audit Commission set out a number of ways in which public-private partnerships can be developed. I hope that the Government and the local authorities will examine these proposals further and produce capital initiatives before much longer.
The hon. Member for Hertfordshire, West (Mr. Jones) mentioned briefly the next issue on which I shall talk—caravan sites, gipsies and the travellers. I notice that the Select Committee recommended last year that the time was ripe for what it called a "modest review" of the effectiveness of Government policy. As a result, a consultative document was issued by the Department of the Environment in March this year.
On the basis of my experience in my constituency over the past 11 years, I cannot believe that the present policy is effective. In 1971, my authority of Greenwich provided a site for 54 travellers, gipsies and their caravans because we had a traditional involvement with such travellers and we thought that it was right to provide such sites. It is much larger than the sites required by the Caravan Sites Act, and cost us more than £300,000 to provide. We had only occasional problems.
Once the Thamesmead area was opened up for development, we were subject to regular invasions of caravans. There were difficulties when the landowners or the borough council used their powers under the Caravan Sites Act to take cases to court. We all know that the court procedure is slow, cumbersome and only moves the problem from one place to another. That was difficult enough until we had a change of political attitudes on the part of the GLC and the London borough of Greenwich in 1982. They declined to take any action to remove caravans in the area unless a severe problem had resulted.
As one can imagine, the caravans are now no longer part of the problem in the Thamesmead area but a permanent feature of life there. This morning, I counted and found that Thamesmead is disfigured by more than 70 caravans, mainly along the main road. My constituents have to put up with the rubbish and the filth created by some travellers, although not all. In particular, those who indulge in metal breaking, site clearance and encouraging others to tip in the areas near their caravans are causing a problem. There is also the problem of the horses that roam wild around people's homes and gardens and even into school areas. On occasion they have caused serious accidents through running free on main roads.
The Greenwich council has now proposed a second travellers' site in Thamesmead for up to 60 caravans. It is less than a mile from the original site. I cannot accept that that is either fair or reasonable. We have to share the burden of responsibility within one borough across other boroughs as well. I accept that we have to make reasonable provision for those who have a travelling lifestyle and who need to move around the area, but I believe that we must also show consideration for working people who pay substantial sums of money in rent, rates and mortgage repayments. They bitterly resent the creation of shanty towns around their homes and throughout their communities.
Therefore, like the Select Committee, I look forward to hearing the outcome of the Government"s deliberations as a result of the consultation document on travellers and


their caravans. I hope that at long last, after all these years, there will be effective action to deal with a problem that has been allowed to drag on for far too long.

Mr. John Mark Taylor: This will necessarily be a brief intervention, but I should like to follow the hon. Member for Bootle (Mr. Roberts) and my hon. Friend the Member for Hertfordshire, West (Mr. Jones), both of whom are fellow members of the Select Committee on the Environment, in expressing appreciation of the excellent lead of my hon. Friend the Member for Hornsey and Wood Green (Sir H. Rossi) on the Select Committee. The more obvious dividend that he collects — and collects again on our behalf as Members of the Select Committee on the Environment — is the way in which he has succeeded in persuading the managers of the business of the House of the importance of Select Committee reports so that they are debated here from time to time. My hon. Friend's record in that regard probably exceeds that of any other Select Committee.

Mr. Allan Roberts: On that point, perhaps the hon. Gentleman will ask the Minister to tell us when we may expect a response to the remainder of the Select Committee's report, on the disposal of nuclear waste.

Mr. Taylor: That is an interesting point. The hon. Gentleman will not be short of techniques with which to advance his sense of urgency about the report, and I am quite sure that he will do so.
The hon. Member for Woolwich (Mr. Cartwright) referred to the north American experience and to some of their major urban problems. Many of them have close parallels with those that we face in our main conurbations. His mention of Baltimore aroused my interest, because it was the pioneer city of homesteading—that most daring of privatisation measures. Homesteading means gathering together the title deeds and handing them over to the young, first-time house purchasing couple for, in many cases, a dollar, in return for a covenant to repair a property that, sadly, has fallen into disrepair. It is a very interesting experiment which we should examine further.
As repair is the theme of the moment, it surprises me that it should he necessary to say again in this Chamber that the curve which it is possible to plot or draw—the graph between deterioration and cost—is not linear and never was linear. Our grandmothers told us that a stitch in time saves nine, and all modern analysis and modern science have led us to precisely the same conclusion: that delayed repair is exponentially expensive. One of the more worrying features that emerges from the environmental studies is that we are too complacent in our repair programmes and repair policies.
I think that it would be right to echo the words of other right hon. and hon. Members in the debate. They returned again, in surprise, to our national governmental practice of annual regimes of Government accounting. The local government experience of many right hon. and hon. Members taught them the difference between the discipline of the capital account on the one hand and the revenue account on the other. All branches of the accountancy profession are absolutely wedded to these principles, yet in our nation's affairs at the highest level we subject ourselves to the kind of financial scrutiny that would be unacceptable to the humblest district auditor.
This is not merely disturbing to me but, as we have heard, it leads to some perverse consequences. It is not just a bizarre way of presenting the accounts on a kind of national receipts and payments basis. It is not just eccentric in that sense. It is actually harmful. It is because of these accounting principles that the Property Services Agency, for example, was faced with what has turned out to be a complete disincentive to enfranchise leases, when other speakers have already said that enfranchising leases would make sense from so many points of view. The accounting technique has, for all practical purposes, prevented what would otherwise be a common-sense policy.
In drawing my remarks to a close, I hope that the hon. Member for Bootle will not mind if I remind him that those with the largest mortgages are very often those who put down the smallest deposits. At that time in their career as property owners, they may be able to put down only a small deposit. I refer to those who buy their first house with a mortgage of 95 per cent. and, in some cases, even more. In my division of Solihull many constituents are buying properties for, shall we say, £32,000. They are just moving over the stamp duty threshold and they are doing so with mortgages of, say, £30,000. I should not want them for a moment to think that the Opposition consider that they are affluent members of society and that they should therefore suffer not only the punishment and penalty of stamp duty but also the erosion of the income tax relief that they have been led to expect. The first-time home buyer is often at the point of maximum borrowing and minimum personal input.
When Select Committee reports are reviewed, many criticisms are voiced, but I end with a compliment to the Property Services Agency. Not long ago I went to see the Cabinet war rooms, a public presentation that both right hon. and hon. Members and tourists are able to visit. That job has been very well done.

Mr. Tom Clarke: I hope that the Under-Secretary of State for the Environment will not take it amiss if it is impossible for me to hear the whole of his wind-up speech, but I have other duties in the House. However, I promise that I shall read his remarks very closely—all the more so, because I hope that he will respond to some of the points that I am about to make.
I address my remarks to class XX, vote 18, of the Supply Estimates that are being considered by the House. I welcome the debate, and particularly the clear pledge by the hon. Member for Hornsey and Wood Green (Sir H. Rossi) that his Committee will conduct a searching inquiry into these matters. I was delighted to hear him give that pledge. I hope that if he has an opportunity to study my remarks, he will feel that the Coatbridge south circular road project is a matter that his Committee ought to consider with extreme urgency.
The subject does not come as a surprise to the Minister. He was present, and indeed he replied, when I initiated it in an Adjournment debate on 25 March, almost three months ago. I am astonished that all that time has passed and my constituency still has such a serious problem. We still make profound criticisms of the method of budgeting and the preparation of estimates by the Property Services Agency. Those criticisms were echoed in general terms by almost every hon. Member who has taken part in the


debate. In the light of those criticisms, I should have expected a decision by the PSA about the Coatbridge south circular road project. I should certainly have expected the Minister and his right hon. and learned Friend the Secretary of State for Scotland to have taken some action by now.
The Minister will be aware that I am referring to the office replacement and the new office provision of the Department of Employment and DHSS offices in Coatbridge. During the Adjournment debate on 25 March, the hon. Gentleman described the offices as
not quite Victorian but very old."—[Official Report, 25 March 1986; Vol. 94, c. 925.]
That hardly describes, in graphic detail, the appalling conditions which exist in both offices. The Minister does not dispute that. He knows that inspectors from the various departments have commented on the conditions which exist. He accepts—I give him full credit for it—that the case for replacing the two offices in my constituency is unanswerable.
Class XX, vote 18, of the Estimates makes no reference to the money which the Minister promised my constituents a long time ago. Perhaps he will put the record straight tonight. As the Minister knows—he has been in touch with the Department of Employment — unemployment in my constituency is about 22 per cent. Those offices would serve the village of Gartcosh—the House knows a great deal about the problems of Gartcosh — which has an unemployment rate of over 30 per cent.
I shall not bore the House with the facts that I put on record during the Adjournment debate. However, I am entitled to remind the House of the promise that the Minister gave in a letter he sent to me in December 1984. I should have expected the money that he promised my constituents to be included in the Estimates or in the Estimates which were last published.
The Minister's letter of December 1984 stated:
The delay over several years in providing a new office at Coatbridge for DE and DHSS has been a result of other pressures on the Property Services Agency's Office and General Accommodation programme. These pressures will continue in the foreseeable future, but the deterioration in the condition of the existing accommodation is I know becoming very severe.
I remind the House that the letter was dated December 1984. The Minister continued:
and I recognise also that a decision now to relocate both Departments to the South Circular Road site could make a valuable contribution to the redevelopment of the area.
As the Minister also responsible for the inner cities, I believe it vital that Departments including PSA should bear in mind the importance of urban regeneration when determining their own programmes. I am pleased therefore to confirm that, despite the tightness of funds, I have now authorised PSA to enter into a commitment for construction of new offices for DE and DHSS at the South Circular Road site which we will purchase on completion in 1986/87.
Time has passed. A start has not even been made on the construction. The Minister had to write to me again on 5 March 1986. He wrote to me again, after all that time had passed and after the commitment and involvement of the Scottish Development Agency, the local authorities, Monklands district council, Strathclyde regional, British Telecom and everyone else who was interested in clearing the site and preparing it for the offices. All that was based on the hopes that the Minister gave to my constituents in the letter he sent to me in December 1984.
The Minister's letter dated 5 March 1986 stated:
It was because I could not allow a contractual commitment to be entered into without funds being earmarked that I had to hold the project up at the last minute. I realise how disappointing this is for all concerned; and I can assure you that I am actively pursuing a solution with my ministerial colleagues in the hope that a new building can go ahead shortly. But at this point. I can do no more than promise to search for funds.
Perhaps the search is continuing. However, there is very little evidence that that is so. The Minister's letter of 5 March came, as he rightly said, as a considerable blow to everybody concerned, not least the staff of the Department and those who frequent both offices who have found that their privacy was not being respected.
The Minister is well aware that the Scottish Development Agency and those involved in the project have already spent about £600,000 on clearing the site so that the building can go ahead. The Minister may argue yet again, after a three-month gap, that the project has not been cancelled; it has been postponed. If he does so, I must remind him that postponements cost money. We estimate that the postponement is costing the taxpayers £450 a day. In the Adjournment debate, the Minister said that Monklands district council had engaged Males and McDonald as its consultants and they would carry out their duties in that capacity. Those consultants were engaged by the PSA. The PSA should accept the responsibility. The PSA should urge upon the Minister the need to reach a solution to the problem.
Because the Minister has said, time after time, that he is actively pursuing the matter, I should have thought that a conclusion would have been reached by now. The Minister said that he was looking for a solution as soon as practicable. I should not have thought it would take three months from the debate on 25 March. I have heard disturbing rumours that the money that might have been allocated to the project may go to a new town somewhere in the United Kingdom, and possibly to a computer project. If such a provision is included in the Estimates, it would be a massive insult to the people of the west central belt of Scotland and especially my consituency. i invite the Minister to clarify the position.
The PSA has been criticised for the fact that, when there is a change of specification, it does not seem to be as alert to the consequences as it should be. That certainly applies in this case. The PSA encouraged the planning for a two-storey building instead of the previous ideas. The PSA must accept the consequences. The PSA cannot argue that that has caused a delay and increased the price. Of course it has, but the PSA should have the experience and knowledge to judge the consequences of its decisions.
I am appalled at the PSA's activities in Scotland, and I am not alone in that view. I am appalled that the promises made when Gartcosh was closed have not been fulfilled. In March this year, the Secretary of State for Scotland said that the Government would do as much as they could to help because of the substantial losses in the steel industry in Lanarkshire. Those views were expressed publicly also by the chairman of the Conservative party and many others.
There have been even more job losses, but what sticks in our gullet is that they have occurred because the Government have failed to co-ordinate appropriately and significantly with the PSA. I am sorry to say that the Under-Secretary of State has not yet lived up to his word to me. I urge the hon. Gentleman and the House to ensure


that there is greater scrutiny of the PSA's estimates. I say that based on the experience in my constituency. If that experience means anything, the PSA, and therefore the Department of the Environment, should come under the greatest possible scrutiny. I hope that the Under-Secretary of State will address himself with greater urgency to this serious problem.

9 pm

Mr. David Winnick: Reading the chapter on housing in the Supply Estimates would not make one realise that a formidable housing crisis exists. There is a passing reference to enabling local authorities and housing associations to provide new homes for those whose needs cannot be met in the private sector, but that is not being done. It is deliberate Government policy that local authorities should not have the financial power and resources to build new dwellings to rent.
I remind the Under-Secretary of State, as I have done previously, that the reduction in housing public expenditure since the Conservative party came to office in 1979 is more than 60 per cent. in real terms. The number of new council dwellings being constructed is the lowest ever in peace time. It has been fairly low in recent years hut, this year, the number of new public sector starts will be almost certainly less than 30,000 and, quite likely, well below that figure.
This has resulted, as one would expect, in an acute shortage of local authority housing. Waiting lists have grown substantially. Hundreds of thousands of people know that they stand no chance of obtaining a mortgage, and will not benefit from any scheme which has been introduced by the Government. They cannot be rehoused by the local housing authority, in the main through no fault of the council. That, as I have stated, has been deliberate Government policy.
The Chairman of the Environment Committee referred to the needs of special groups in the community for council dwellings. I pointed out that many people—obviously those on below-average incomes, as well as many others —are not in a position to obtain a mortgage. Imagine a person with no substantial savings who earns less than the average income and is trying to buy a place in Greater London at current house prices. To some extent, that problem occurs in other parts of the country as well.
This explains why local authorities are spending £1 million a month on bed-arid-breakfast accommodation. Research has shown that, for a couple with two children, the saving in providing new council accommodation rather than putting them in bed-and-breakfast accommodation would be between £7,000 and £10,000 a year. Is it not disgraceful that so many people, including couples with children, are now in bed-and-breakfast accommodation? What will the Government do about the problem? What additional assistance, if any, will they give local authorities so that it is not necessary to place families in that unsatisfactory accommodation?
The report from the Environment Committee notes concern about the state of repair of the existing housing sector. Wisely, they point out that neglected maintenance is not merely postponed but gives rise to the need for even more maintenance later on. It is a very telling point and one would hope that the Government take it on board.
The Committee cross-examined witnesses from the Department of the Environment. Some £19 billion is

needed for all the necessary work to be undertaken. That figure was not disputed by the civil servants who gave evidence before the Environment Committee.
Last week, in a speech that was amazing even by the standards of this Government, the Minister for Information Technology stated that councils were demanding extra billions for repairing and modernising council housing. He complained about that. He said that the claims were exaggerated and were designed to curry favour with the unions. He condemned demands for extra spending by his ministerial colleagues as electoral bribes. In his warped view, he said that council housing breeds slums, delinquency, vandalism and waste. What a truly disgraceful and ignorant attack by a Minister of the Crown upon the millions of residents who live in council dwellings. That Minister showed himself to be utterly unfit to hold public office.
It is of some interest that so far not one of his ministerial colleagues has come to his defence, including the Prime Minister. I immediately tabled a question to the Prime Minister, as one would expect an hon. Member to do. I asked her if her hon. Friend's speech last Monday week reflected Government policy. 'The Prime Minister gave some sort of justification for the Government's housing policy, but she never mentioned the Minister or his speech. I do not know whether that was considered to be some repudiation of his remarks.
It is likely that the comments of that Minister reflect to an extent the prejudices and dislikes of public sector housing that some of his colleagues, including some in the Cabinet, may have. Clearly, if that is the position those Ministers will not say anything in public. I should not be at all surprised if the general feeling in the Government is that that Minister opened his mouth too wide. It has been said that the speech was supposed to give him some prominence, that he was fed up with being obscure, that perhaps it was a hid for promotion. The next time that there is a Government reshuffle, we shall see whether his gamble has worked.
Undoubtedly, up and down the country, there are estates that the Environment Committee commented on which need to be modernised, improved and repaired as quickly as possible. I make no apology for returning to the subject of an estate in my constituency. I have mentioned it before. It causes me a great deal of anxiety, but even greater anxiety is caused to the tenants who have to live on that pre-war estate.
These houses, as I believe the Minister should know by now, were built between 1934 and 1938. They are desperately in need of modernisation. They lack modern facilities and in many cases there are no indoor toilets. The kitchens are unplastered. Hand basins have not been provided over the years. The estate is urgently in need of modernisation.
The fault certainly does not lie with the tenants. No one in his right mind would suggest that tenants are responsible for a pre-war estate getting into its present condition, where the minimum of work has been carried out over the years. Of course, the work should have been done some time ago. Walsall metropolitian borough council has been keen for the estate to be modernised, but the housing investment programme allocation in recent years has been insufficient for the work to he carried out.
Last July I took a deputation from the residents' association to see civil servants at the Department, as no Minister was willing to see us. In the following month, the


senior official at the west midlands regional level went round the estate and saw the amount of work that needs to be done. More recently, negotiations have taken place between the council and the Government's urban housing renewal unit over funds. The unit has undoubtedly been trying to pressurise the council to sell some land and properties on the Rosehill estate to the private sector. The local authority has made it clear that it is not in favour of any such sale. There have been several meetings of residents and the tenants have also made it clear that they are not in favour of any land or houses being sold to the private sector. I should point out that this has nothing to do with selling to existing tenants.
In a written answer on 9 June the Under-Secretary of State who is to reply to this debate said that although the unit encouraged local authorities to take full advantage of obtaining private sector contributions
There are no rigid preconditions for schemes supported by the urban housing renewal unit".—[Official Report, 9 June 1986; Vol. 99, c. 22.]
The Under-Secretary is nodding. If that is the position, the local authority should not be under such pressure to sell off the land and houses in order to obtain the extra funds that are so necessary if work is to begin at the end of the summer.
It is essential that the Rosehill estate should be modernised. Indeed, I shall continue to table questions about it, because the funds should be made available and the work should begin at least by the end of the summer.
The Government have a deplorable housing record. People are increasingly coming to understand the need for more money to be spent on housing, as well as on the Health Service and education. Last night I was upstairs watching "Panorama". In the main it interviewed Tory voters, or at least those who had voted Tory. Several of them, I believe, were members of the Conservative party. It was clear that if there is a choice next Budget time between a cut in taxation and more public expenditure, they want more public expenditure. They are absolutely right, because that makes sense.
The Health Service, education and housing are desperately in need of more funding. Those interviewed last night were mostly owner-occupiers, just like most—if not all — Members of Parliament. But, unlike Ministers, they understand that those who do not have the means to become owner-occupiers still have a right to proper and adequate accommodation. That accommodation is only likely to be provided by local authorities and genuine housing associations. Incidentally, we should not forget how housing associations have also had their funds undermined during the past few years.
The previous debate involved employment issues. If local authorities had the finances necessary to build and modernise houses, many of those who are unemployed would be able to earn a living. It is estimated that roughly 25 per cent. of all those involved in the construction industry are currently unemployed. Would it not be sensible for those people to earn their living and provide the dwellings that are so urgently needed? However, we do not expect any sense from this Government.
We have been told that there will be no major changes in Rent Act regulations during the lifetime of this Parliament. However, we have not been told what changes might occur if the Government are re-elected.

The Minister has a duty, before the next general election, to explain to the country what will happen if the Government are re-elected. Will the present regulations be abolished? Will there be a position similar to that under the Rent Act 1957 when all newly rented accommodation on the market was decontrolled, with no security for tenants and no ceiling to rents? The country will want to know that. It is no good Ministers trying to keep it a secret. I do not believe that the Government have any chance of being re-elected, but the Opposition, at every possible opportunity, will press the Government about what changes they intend to make if they are re-elected.
I have raised matters of great importance to many people. I mentioned the speech last week by the Minister for Information Technology. It is wrong for the Government to continue on a path that means that so many people are denied adequate housing. It is right and proper that Opposition Members use every opportunity, such as that presented tonight, to explain what is happening, to put their case and to try to get Ministers to understand how important it is that people should be properly housed.

Mr. Jack Straw: I commend the speeches of my hon. Friends the Members for Bootle (Mr. Roberts), for Monklands, West (Mr. Clarke) and for Walsall, North (Mr. Winnick). My hon. Friend the Member for Walsall, North reminded the House of the speech last week by the Minister for Information Technology, who made offensive and insulting remarks about those living on council estates. His description of them is something unknown to us. My hon. Friends and I know a little about living on council estates, where most of us spent our childhood. The Minister's description of delinquent vandals is something that we would not expect, even from Conservative Members.
My hon. Friend also raised the question of the Government's policy towards the Rent Acts. Ministers have said that there will be no major legislation before the next election, but that is because they have electoral cold feet. We want to know what conclusions were reached in the major review of the private rented sector that was carried out within the Department of the Environment last year. When will the results be published so that the House and the public can judge whether it would be right to embark once again on a major decontrol of the private rented sector?
Taken together, the Estimates of the Department of the Environment and the PSA under classes IX, X and XX amount to £13,035 million, which on any basis is a great deal of money. The principal function of the House is to order and superintend Supply to the Crown. That difficult task is made more difficult given the magnitude of the figures with which we are dealing.
I would like to begin by commending the hon. Members for Hornsey and Wood Green (Sir Hugh Rossi) and his colleagues, including my hon. Friend the Member for Burnley (Mr. Pike), my hon. Friend the Member for Islington, South and Finsbury (Mr. Smith) and my hon. Friend the Member for Bootle for their work on the Select Committee on the Environment and for the excellent and perceptive reports they have produced. The reports emphasised much of the unsung work of the Select


Committee. They are a testament to the initiative taken by the right hon. Member for Chelmsford (Mr. St. John-Stevas) in the reforms that he introduced in 1979.
In both reports, the Select Committee has secured a fine balance in the subjects upon which it focused. There is always a tendency for council committees, and perhaps also for Select Committees, to favour the small, understandable items rather than the large, more important but less comprehensible items. I am sure that we can all tell stories of the millions of pounds worth of expenditure shooting through council committees while there were major arguments over the expenditure of £100 on the mayor's chain or a gown for the mayor's attendant.
In my judgment, the Select Committee was right to focus on one or two relatively small issues as sometimes, by small example, bigger issues are raised. Although the total expenditure on dog licences is, in the vast sweep of Government public spending, a mere drop, none the less the heat that the issue can generate is disproportionate to the expenditure and it is right that we should consider it.
I can see my hon. Friend the Member for Burnley smiling. Those of us who are acquainted with north-east Lancashire have burned on our souls the fact that the Labour party in that area went down a wrong turning over the control of dogs in parks and almost came to grief. When I was a member of Islington council, i learnt an early lesson in the art of the possible. When I was chairman of the housing, management and maintenance committee of that worthy council, we were urged by a group of tenants on an especially difficult block estate to enforce the conditions of tenancy which stated that there should be no dogs. We set about enforcing those conditions and we were quickly down the road that led us to conclude that the only way to enforce these rules was to evict the tenants. We finally decided that some things were impossible to implement, no matter how desirable, and we were forced to back off.

Mr. Peter Pike: My hon. Friend referred to the experience of Burnley council and the difficulties that arose over a dog ban in an small section of the parks in the borough council. I hope that my hon. Friend will stress to the House the difficulties of this kind of issue. Will he stress that whatever is done ultimately over the future of dog licences—whether there he an increase in the fee or an abolition of' it—it is most important that action is taken nationally rather than that it should be left to the local level, where the aggravation caused will be out of all proportion to the implications of the case?

Mr. Straw: I share my hon. Friend's view from the experience in Burnley and from that experience burned on my soul while I served on Islington council.
This issue arouses an enormous amount of heat. As a parent, I am deeply concerned about the state of the parks in which my children have to play. Although I am not a consensus politician, I can offer the Minister the chance of all-party agreement on the issue of the control of dogs. This is generosity indeed. This issue can only be solved if it does not become one upon which hon. Members base party political affiliation. It easily could be such a case if it is not handled properly.

Sir Hugh Rossi: Will the hon. Gentleman spell out exactly what his offer is? His comments are very intriguing. His colleague, the hon. Member for Burnley (Mr. Pike), suggested that the issue should he dealt with not at local

level but at national level—that the Government should take the stick for any unpopularity that results. I would be interested to know whether the Labour party is now suggesting that it is prepared to implement the working party report recommendations that were sent to the previous Labour Government upon which no action was taken for many years.

Mr. Straw: My offer is to sit down with the Government, if they wish to do that, to see whether there is a way in which we can reach agreement. It is extremely difficult for any Government to act because they are scared of the political repercussions. The matter should not be a subject of the party political divide.
Before I was diverted, I was saying that the Select Committee has identified some areas of relatively small expenditure which are none the less important and that it was right to focus on some areas of major expenditure, especially housing maintenance and the home loan scheme, on which many millions are spent at the moment and on which many millions more will have to be spent in the future.
My hon. Friend the Member for Bootle covered the housing issues in great detail and with great eloquence. Class X amounts to £10·125 billion, of which £9·246 billion is devoted to rate support grant for England. The legend at the top of class X, vote 6, says that the vote is a cash limit. Whatever other decisions we would make about the level of rate support grant, we shall keep it cash-limited.
The vote is cash. Unlike the discussion of funny numbers in the public expenditure White Paper, we are here discussing cash which is being paid in aggregate to local authorities. We are not discussing the much more difficult figures in the public expenditure White Paper concerning overall local authority spending— that paid for by rates and that paid for by the Government. During the past three years, we have repeatedly argued that it would be far better for the Government to focus on what they contribute to local authorities rather than to try, through the public expenditure White Paper mechanism, to control that which they cannot truly control— total local authority expenditure. We have challenged Ministers to deny that, in the context of the things that they say that they worry about, such as the money supply and the public sector borrowing requirement, local authorities' current expenditure out of the rates cannot affect the major monetary aggregates because local authorities cannot borrow long-term to finance current expenditure.
The then Secretary of State dismissed such arguments when the Rates Act 1984 was going through Parliament. I am pleased to see that some Ministers accept that there is a good deal of validity in what we have said. The previous Secretary of State—now the Secretary of State for Education and Science—is reported as having said that he accepts in broad terms the case that we are making. The Financial Times reported on 27 May that even Treasury Ministers now accept a case such as we have made. As this is a large sum of money, I should be interested to have the Minister's views on the relationship between the Government and local government.
Perhaps the Minister would also like to say something about class X, vote 8, on rate rebates. At the moment, people on the lowest incomes receive a 100 per cent. rebate. In the Social Security Bill, which is now in another place, the Government are trying to ensure that, regardless of a person's poverty, everybody should have to pay at least 20


per cent. of their rates and, in future, 20 per cent. of their poll tax. The Government were defeated last night in another place. There has been a suggestion on the tapes that the Government will overturn that decision. Also on the tapes are the sage words of an hon. Member who is on the wet wing of the Conservative party, like the Under-Secretary of State—the hon. Member for Brentford and Ongar (Mr. McCrindle). I hope that the Government will follow his wise counsel and accept the defeat in the Lords. If they do, they will be doing themselves at least an electoral favour.
I should like to raise with the Minister the comment in the report of the Select Committee of the Environment about the administrative costs of the London Docklands development corporation. This is supposed to be the jewel in the crown of the Government. It is certainly true that the LDDC can spend money as if there were no tomorrow —if one judges by the quality of the paper on which its PR documents are printed. It is an intriguing comment and I should like to hear the Minister's view on it. The comment appears at paragraph 3 in the report.
I should like to turn to the Property Services Agency which is class XX, vote 18. I shall deal first with one specific item before turning to the wider issues that are raised in the report about the property repayments system, dispersal, and the issue of rentals. The specific issue is about the proposals, as part of a major reorganisation, to close the area offices of the PSA at York, Leeds and Newcastle and to concentrate the work at the Leeds regional headquarters. This has caused a great deal of worry to the PSA staff in York. The staff side has been in direct correspondence with me and so has the Labour parliamentary candidate for York, Mr. Hugh Bayley, who has pursued the matter with great vigour with my colleagues and with me.
The PSA staff side and Mr. Bayley made two comments. First, they say that the proposal would lead to the loss of 60 jobs in York and possibly up to 20 redundancies. Secondly, they say it would lead to a substantial net loss to the PSA, and that it would not save money and there would be no increase in efficiency. The loss of jobs may be small when compared to the millions of people who have lost their jobs in the last six years, but it is serious. There is no point in saying that some of the people who lose their jobs will find jobs in Leeds, because those jobs will be lost to York.
I shall be happy to give the Minister the figures that I have been given about cost savings and outgoings. The figures were drawn up by the staff side and they suggest that on capital costs there will be savings of £300,000 and an outlay of £2·27 million. Therefore, there is a much greater capital outlay than there is savings. On running costs, there will be a saving of £380,000 and an outlay of £2·4 million. I hope that the Minister will give us far more details than he has given the House up to now about the kind of savings that are likely to be achieved.
I suspect that this exercise is part of some empire-building reorganisation and not part of a sensible proposal simply to reorganise the PSA. Insult is added to injury in York because I think it is acknowledged by senior officials, including I am told Mr. Geoffrey Chipperfield, at a meeting between him and the full-time officers of the union that the York PSA office is good and cost-effective. If that is the case, why should this reorganisation go ahead?
The hon. Member for Hornsey and Wood Green spoke of the rental policy of Government buildings. The subject is also raised in the report. Of the total of £994 million, some £225 million of the PSA vote is spent on rates. It is the largest single item. Three issues are raised here. The first is the method of charging under the property repayment system. The idea seems to be to charge Departments for the cost of the accommodation they use. That is a sensible idea, and one which encourages financial stringency. According to paragraph 8 of the Select Committee report, the discipline is a crude one because Departments are charged a standard rate whatever the accommodation they occupy. In other words, they are charged at a notional rate.
If the discipline is to work, it is essential that a Department should be charged for the cost of the accommodation that it occupies. There is plainly a difference between the cost of accommodation in Westminster and that, for example, in my constituency. The Committee is right to say that if Departments are charged only notional rents, it becomes a vast paper exercise with no benefits.
The second issue that is touched upon by the Select Committee's report is the dispersal of Civil Service jobs from London to the north. If Departments were charged, office by office, the economic cost of the actual rent of the accommodation would give natural encouragement through the mechanism of the market, to which Conservative Members are more attached than we are, to disperse jobs and accommodation from central London.
One reason why, as far as one can judge, there will be no savings in transferring the York office to Leeds is that rent levels are roughly the same. In fact, I think that they are rather less in York than in Leeds. But there are enormous differences in the cost of accommodation in central London and the north of England, as the excellent report from Debenham Tewson and Chinnocks has made clear.

Mr. Robert B. Jones: Perhaps more relevant is the fact that there is a considerable difference between renting a high street site and one that is slightly further from the centre of a town or city. I had hoped that minds would be concentrated on relocating offices to a place to which people would find it easier to travel and where parking might be easier as well as cheaper.

Mr. Straw: That is also true. Indeed, the report makes it clear that it is a lot cheaper to site across the river in London, even given rate levels, than it is to site this side of the river.
Let me give the combined rent and rate figures so that we are dealing with the total cost of accommodation which are provided in the report. In Westminster the cost is £35·20 per sq ft and in Lambeth £21·25, compared with Manchester which is £9·85, Sheffield £9·15 and Newcastle £8.70 a sq ft. There are enormous savings to be had if it is possible to locate staff outside London.
I do not underestimate the problems of dispersal. Some jobs have to be in central London. This is the capital city and the seat of government. But there is scope to do much more and it is tragic that the dispersal policies were abandoned by the Government in 1979. I hope that we shall hear from the Minister that the Government are now seriously looking at the possibility of changing that policy.
My last point is on the distinction between renting and buying that is made in the report. The point was well made


by the Chairman of the Select Committee. I say only that millions of pounds are being wasted by the fact that the PSA and the Department are trapped by a ludicrous Treasury convention. There is no good reason whatever for preventing the PSA from buying freeholds and every reason for establishing new conventions—that is all they are: there is nothing God-given about them—of the kind that any other company or decent public institution would follow so that capital is accounted for in a different way. I hope that we shall hear more from the Minister now than has been hinted at in the report.
The Estimates are important. I commend the work of the Committee and I look forward to the Minister's reply.

The Parliamentary Under-Secretary of State for the Environment (Sir George Young): The debate has covered a wide range of issues across my Department and the PSA. I shall try to cover most of the points that hon. Members have made, focusing particularly on the recommendations of the Select Committee's report. If I do not cover all the points, I shall write to the hon. Members concerned.
I join in the tribute paid to my hon. Friend the Member for Hornsey and Wood Green (Sir H. Rossi), the Chairman of the Select Committee. The House and the Department are lucky to have an expert Committee with a skilled Chairman. As a former senior Minister he knows what questions to ask and where some of the bodies are buried.
I shall not be sidetracked by some of the broader issues that have been raised. I do not propose to deal with the rate support grant system which was raised by my hon. Friend the Member for Hertfordshire, West (Mr. Jones). We have had several debates on housing policy generally, in which the hon. Member for Walsall, North (Mr. Winnick) has taken part, and I shall certainly not embark on a macroeconomic speech on some of the other issues that were raised.

Mr. Winnick: rose——

Sir George Young: I must try to answer some of the questions which have been posed. If I have time towards the end, I shall give way to the hon. Gentleman.
I propose to start with housing mobility, the first issue raised by my hon. Friend the Member for Hornsey and Wood Green. The Committee made a number of recommendations about the national mobility scheme. The scheme is a voluntary arrangement between local authorities, and the Government have no power to compel membership or compliance. Of course, we must try to persuade authorities to honour their commitment to offer I per cent. of vacancies to applicants for the scheme, and eventually to increase that percentage. I have just become the chairman of the National Mobility Steering Committee and I intend to use that position to discuss the possibility of expansion with the local authority associations.
The mobility scheme is just one part of our policy towards improving housing mobility. It is useful and we will do our best to develop it. We have the right to exchange as part of our tenants charter, and we have also implemented the tenants exchange scheme.
I now turn to the issue of dog licensing. The Committee said:
The Deportment is obviously having difficulty in deciding what to do:

I would not dissent from that. I shared the Committee's hope when the House debated my Department's Estimates last year that the vexed question of dog licensing might have been resolved by now. We have long acknowledged, on financial grounds alone, that the present licensing arrangements are absurd. We remain determined to change them. As the House knows, it is not an issue on which any Government finds decisions easy, and it has not yet been possible to announce our conclusions on the future of dog licensing in Great Britain. Opinions are sharply divided, and I am grateful that this year the Committee has made a firm recommendation on the course which the Government should follow. We will, of course, consider that carefully before we reach a decision. However, I must remind the House that abolition of the requirement to have a licence to keep a dog would require primary legislation, and I cannot guarantee that an early opportunity for that will be available.

Mr. Alexander: rose——

Sir George Young: I shall finish this before I give way.
I understand the impatience and frustration underlying the motion tabled by my hon. Friend the Member for Hornsey and Wood Green to reduce the Estimates in relation to provision for the issue of dog and game licences. As I have just said, I must plead with him and the House to be patient a little longer. The policy is notfficequite ready to leave the kennel. We want to consider the Committee's recommendations, which have been with us for less than two weeks.
I must stress that our arrangements with the Post Office, which collects the licence fee on behalf of local authorities, are contractual and we cannot bring them to an end overnight before an alternative to the present licensing system is in place. As I have said, the aboliton of the licence requires legislation. I think that it would be a precipitate step for the House to reduce Supply tonight, although I appreciate my hon. Friend's wish to see the present arrangements brought to an early end.

Sir Hugh Rossi: Can my hon. Friend say how long it would take to terminate the existing contractual arrangements with the Post Office if the decision was made to do that? Can he also explain why that cannot be done, even before the Government make up their mind whether to introduce a different scheme? My Committee was primarily concerned with the waste of public money.

Sir George Young: I think that there would be a penalty if the Government broke the contract with the Post Office. I am afraid that I cannot give my hon. Friend the precise details of the contractual arrangements with the Post Office or how much notice we would have to give. However, we could not bring them to an end overnight and we would have to compensate the Post Office. I shall of course write to my hon. Friend as soon as I have that information. However, I hope that my hon. Friend will feel able to withdraw the motion on the assurance that we wish to bring the present arrangements to an early end. We hope that it will not be too long before we can make a firm announcement.
The report suggested that we should review the home loan scheme in the light of present day conditions and the needs of first-time buyers. We regularly review housing policy and the part that the home loan scheme plays. It provides the first-time buyer who has saved for two years


with a grant of £110 and a loan of £600 free of interest and capital repayments for five years. The total figure of £710 is a considerable sum to a marginal first-time purchaser and I know that it is welcome to many people. We are committed to increasing the level of owner-occupation and the assistance to first-time buyers will be kept under review. My right hon. Friend the Secretary of State will shortly be making an order increasing the limits in the light of house price movements. The limits are, and have been since the scheme's inception, reviewed regularly and revised when necessary.

Mr. Winnick: The Minister mentioned various schemes for owner-occupation and he will know of our view that there is also a need for rented accommodation. Does he associate himself with the remarks about council housing made by the Minister for Information Technology?

Sir George Young: I propose to reply to the debate and the recommendations of the Select Committee.

Mr. Winnick: Come on.

Sir George Young: I read a very good article by my hon. Friend the Minister for Information Technology in The Sunday Times which seemed to be an excellent statement of policy.
I share the concern expressed by many hon. Members about the condition of the nation's housing stock. We must keep it in a satisfactory condition. The latest evidence from the 1985 Greater London house condition survey shows no dramatic alteration since 1979, although the number of dwellings lacking amenities fell. -1 he 1985 inquiry into the condition of the public sector stock showed that local authorities considered that significant sums needed to be spent. We took action and increased the capital resources available by £200 million, and authorities should now be giving increased priority to the problems of their stock.
As the hon. Member for Woolwich (Mr. Cartwright) recognised, more public spending is not the only answer. He talked about partnership, and authorities should develop imaginative solutions on problem estates, involving the private sector where possible. My Department's urban housing renewal unit is making good progress, going round authorities and discussing ways of turning round rundown estates, and schemes for 24 estates have already been approved.
We are not standing still and decisions are being made, but we need a full survey to help us decide priorities. That is the point of the English house condition survey every five years. The survey starts in September and will be larger than any previous survey, involving the collection of more information. Unfortunately, it will take time to analyse the results, and I would not want to predict how long that might be. However, in response to the Select Committee's request for a further report on these matters before it considers the 1987–88 Estimates, I shall let it have a note on the progress we have made.
Finally, on the Department of the Environment's Estimates, the hon. Member for Blackburn (Mr. Straw) mentioned the London Docklands development corporation. The Select Committee commented on the administrative costs of the corporation and I welcome, as it did, the progress being made to reduce its costs. There

was an absolute fall in its administrative budgets in 1986–87 compared with 1985–86. I know that the corporation wants to make more progress, and I intend to encourage it.
If I do not deal with all the points made about the Property Services Agency, I shall write to hon. Members. This is the third time that the Select Committee has examined the PSA Estimates and, as we might expect from its Chairman and members, it has turned in a thoroughly useful report. I particularly welcome the constructive nature of its work. An essential part of the Committee's job is to monitor the PSA's current performance. I hope that we have been able to show that, where improvements are needed, they are in hand.
Much of the report is directed at making forward-looking recommendations on the way in which the PSA expenditure should be handled and presented. Some of them are not easy to accept and implement, particularly those which come up against the normal conventions, whatever hon. Members may think about them, which involve increased public expenditure. But all the recommendations are helpful and workmanlike. We should like to move in the direction proposed by the Committee, and its ideas and support will be valuable in making progress.
The Select Committee criticised the Government for not setting up a monitoring system when PRS started in 1983 which might have identified what economies were being made. With the benefit of hindsight, I accept that criticism, although it is fair to add that at the time this measure was one of several aimed generally at promoting greater cost consciousness among Civil Service managers. We would have argued, as indeed Lord Rayner did, that it was justified on those grounds. However, the changes that will take effect on 1 April 1987, following a major review of the system are a step forward from the original concept of PRS. This time we have thought it right to monitor the effects.
Therefore, we asked all Departments to complete a questionnaire showing the current size of their occupations of the civil estate, their expenditure on their present delegated functions, and the staff resources deployed on PRS. We shall ask the same questions in subsequent years and so compare the position before and after. We have also commissioned annual performance reports from the new formed planning and liaison system that we are setting up between the PSA and our client Departments throughout the regions. We shall be looking more selectively at the value for money being achieved in certain properties where consultants will advise us on what is being achieved under the existing rules by the PSA and what happens when clients take on the increased delegations that they will have from 1 April next year.
I do not claim that these results will show conclusively that the PRS is solely responsible for any given level of savings, because one cannot always isolate any one pressure for economy from the many other measures that we are taking to promote cost effectiveness. We should at least have a much better starting base for considering the case for any further changes in the system when it is next reviewed in 1988.
My hon. Friend the Member for Hornsey and Wood Green referred to commercial accounts. We see the potential advantage of commercial accounts, but we are also aware that, as well as possibly being expensive to introduce, they might not be easy to adapt to the PSA.


Before going ahead, we want to make a thorough study of the advantages to be gained and the cost involved. That is why we are calling in consultants to make a study of the options. We expect to do this during the summer. I cannot give a date for a completion of the study because it will, to a large extent. he dependent on what the study finds. We envisage the consultancy being divided into at least two stages so that we have an opportunity to stop and think about any problems revealed in the early work. I hope to he able to show the Committee at least the first fruits of this work when it examines the PSA on our Estimates for next year.
On capital expenditure, there have been a number of comments that the convention for the public sector was different from the convention for the private sector. The study to which I have referred will necessarily have to look at different treatments of PSA capital and current expenditure and we must await that study to see what options are available.
My hon. Friends the Members for Hornsey and Wood Green and for Hertfordshire. West spoke about buying offices as opposed to leasing them. It is some time since we did a detailed study of the economics of owning freeholds as opposed to leasing, and we should be happy to look at the situation again. The Committee makes the fair point that recent movements of the property market are likely to have reduced the current advantages of purchasing options. The inherent advantages of ownership are likely to be large enough for us to continue to gain, and we shall bear in mind the Committee's recommendations.

Sir Hugh Rossi: The point is not merely the possibility of being able to buy freeholds instead of leasing, but the ability to move into the market quickly if an opportunity comes to buy a freehold at an advantageous price. That requires immediate action and great flexibility. Can that be looked at?

Sir George Young: I hope that my hon. Friend's persuasive report will be read by the Treasury which, as he will know, has overall responsibility in public expenditure for decisions such as this. I accept that there are advantages in owning one's estate rather than leasing it.
There have been errors in estimating the procedures and the performance to which my hon. Friend the Member for Hertfordshire, West referred. No Minister can be happy that any errors in estimating should occur, hut, at the very least. I hope that the size of the errors and the number of cases will be reduced in later years both by the use of improved control procedures and by stricter application of these to projects. An essential part of the procedures is close monitoring of performance. I am involved in this myself because all larger schemes have to be reported to me before a contract is let, and I shall be looking carefully at all of them to see that they are being properly controlled.
As I explained to the Committee in my letter of 19 May, published in the report, we have had cause to tighten up this procedure, which I regret did not operate properly in the case of the Natural History museum scheme. I trust that, as a result, there will be no further cases of that sort. More generally, the PSA has taken on board the need to look at performance not just case by case, the basis on which financial control has previously been carried out, but right across the board. This requires a statistical

approach to measuring performance and in the short term may be limited by the need to do it manually. Within the next two years or so, we hope to be able to build this analysis into the replacement computerised management information system for new works projects which is part of the PSA's information technology strategy. We shall try to meet the Committee's request to include in next year's Estimates information about the design stage to which cost figures relate.
I turn to my hon. Friend's suggestion that £20 million should be removed from our Estimates. Of course I understand the concern about the large increase in cost. I share that concern, even though, as I believe the Committee recognised in its report, that is not characteristic of the PSA programme as a whole. The way to deal with such cases is to concentrate on improving the financial control of projects. As I have just said, we hope to make progress. However, it would not strengthen our hand if we reduced the PSA's major new works provision this year by £20 million.
As the Committee knows better than any other right hon. or hon. Member, the vote for this Estimate is very tightly drawn. Already we face major difficulties on new works and other subheads in keeping expenditure within the provision. Most of the expenditure under the new works subhead is by now related to work in progress. On the office programme, out of the total provision of £46 million, about £40 million relates to contracts that we have already let; and because of the pressure on the vote, the remaining £6 million of new starts must now be at risk. Very little, therefore, of the £40 million could be saved without bringing work to a stop and incurring large penalty payments.
To save £20 million would require a ban on all starts for specialised building projects. It would involve stopping progress on two new prisons, providing 1,310 places, and it would also involve stopping work on some court schemes. In both cases, the programmes are urgent. In view of the consequences, of which I hope my hon. Friend is aware, I trust that he will not press that motion to a Division.
I have in front of me a letter to the hon. Member for Blackburn about reorganisation in the north-east region of the PSA that I shall sign the moment that I sit down. I hope that he will find that it is a helpful response to the issues that have been raised.
On PRS, we moved from 1 April 1986 to a new system that assesses the market rental value of each property, building by building. Therefore, occupying Departments will get the full benefit of reduced rental payments by moving from expensive locations to cheaper ones.
The hon. Member for Monklands, West (Mr. Clarke) referred to a matter that he raised in an Adjournment debate about three months ago. The project has not been abandoned. We are looking for the resources with which to make progress. I acknowledge the hon. Gentleman's concern about getting this project off the ground. Conditions are not satisfactory in the DHSS office that is involved. Subject to the usual discussions on resources that take place at about this time of the year, we hope to be able to reach a decision on the matter later this year.
The Committee also drew attention to the PSA maintenance backlog. We accept that more resources will be required. We are holding discussions with the Treasury about it, but I do not have to tell the House that maintenance demands have to be balanced against other


public expenditure requirements. That is the purpose of the public expenditure survey upon which we have just embarked.

Mr. Winnick: What about Rosehill?

Sir George Young: I am able to confirm that there is no insistence on involvement with the private sector in Rosehill. If the hon. Gentleman looks at the schemes that have been approved by the urban housing renewal unit, he will find that disposal is not a component of the majority of the schemes. However, I hope that he recognises that many Labour-controlled local authorities have entered into agreements with the private sector that involve disposal. The agreements are supported by tenants and local residents. I hope, too, that the hon. Gentleman will not adopt a dogmatic approach by denying the role that the private sector has to play in tackling the problems on estates such as Rosehill.
Vigorous action has been taken by the PSA in the past two or three years to improve performance in those areas where criticism has been voiced. I refer in particular to the steps that have been taken to stamp out fraud and corruption and to improve the management and monitoring of the maintenance operations that are carried out by the PSA's territorial organisation. As recommended by the Committee, we have substantially increased the amount of work that is delegated to occupying Departments under the PRS scheme.
The Committee's report shows that we need to improve the procedures for handling major new works, although the failures have been isolated. I assure the House that the necessary improvements will he tackled vigorously. In effecting those improvements, the PSA's chief executive will be assisted by three new outside members of the PSA's executive board who will bring to it expertise in building, property and finance. Having said that, I hope that the probation upon which my hon. Friend placed me over the £20 million will now be discharged.

Sir Hugh Rossi: By leave of the House, Mr. Speaker, may I say that I accept the difficulties that my hon. Friend the Under-Secretary of State has mentioned with respect to the £20 million. We shall investigate the PSA in depth and, therefore, keep our powder dry on that aspect.
As for dog licences, I await my hon. Friend's letter on the contractual relationship with the Post Office. Again, we shall keep our powder dry on that. Possibly, we shall return to that matter at the first opportunity. On that basis, I shall not move the motions.

Question deferred, pursuant to paragraph (2)(c) of Standing Order No. 19 (Consideration of Estimates).

It being Ten o'clock, MR. SPEAKER proceeded to put forthwith the Questions which he was directed by Standing Order No. 19(5) (Consideration of Estimates) to put at that hour.

ESTIMATES 1986–87

Class VIII, Vote 3

Question,
That a further sum, not exceeding £27,735,000, be granted to Her Majesty out of Consolidated Fund to defray the charges which will come in course of payment during the year ending on 31st March 1987 for expenditure by the Department of Employment on the administration of benefit services and on central and miscellaneous services.
put and agreed to.

Class IX

Question,
That a further sum, not exceeding £1,010,095.000, be granted to Her Majesty out of the Consolidated Fund to defray the charges which will come in course of payment during the year ending on 31st March 1987 for expenditure by the Department of the Environment on Housing, as set out in !louse of Commons Papers No. 284-IX.
put and agreed to.

Mr. Speaker: then proceeded to put forthwith the Questions necessary to dispose of the remaining Estimates appointed for consideration this day.

Class X

Question,
That a further sum, not exceeding £5,820,177,000, be granted to Her Majesty out of the Consolidated Fund to defray the charges which will come in course of payment during the year ending on 31st March 1987 for expenditure by the Department of the Environment on Other Environmental Services, as set out in House of Commons Paper No. 284-X.
put and agreed to.

Class XX, Vote 18

Question,
That in respect of Class XX, Vote 18, for expenditure by the Property Services Agency of the Department of the Environment on acquisitions, public building work, accommodation services, administration and certain other services for civil purposes in the United Kingdom, the balance to he surrendered to the Consolidated Fund be £171,101,000.
put and agreed to.

BUSINESS OF THE HOUSE

Ordered,
That, at this day's sitting, the Commonwealth Development Corporation Bill [Lords] and the Land Registration Bill [Lords] may be proceeded with, though opposed, until any hour.—[Mr. Malone.]

Commonwealth Development Corporation Bill [Lords]

As amended (in the Standing Committee), considered.

New Clause 1

TAX EXEMPTION

'The Commonwealth Development Corporation shall be exempt from all taxes and imports imposed on bodies corporate in the United Kingdom.'.—[Mr. Bowen Wells.]

Brought up, and read the First time.

Mr. Bowen Wells: I beg to move, That the clause be read a Second time.
This recommendation was made to the Government in 1982 by the Select Committee on Foreign Affairs in the report on the Commonwealth Development Corporation. I should like to run through briefly the reasons why the Select Committee considered why this would be an advantageous position for the CDC.
The British Government taxes the CDC's profits in this country, and the host country in which the investment is made also taxes the CDC's operations, project by project or, alternatively, as a corporation as a whole within the country in which the investment is made. This means that there is a leaching of money, first to the host country. We might say that this is a sensible and proper arrangement whereby the Government, by facilitating the CDC's investment in that country, gain tax that they can use for social and political purposes, as they so decide. At the same time, it reduces the amount of money available to the CDC, and therefore to the country in which that investment is made, which can then be re-invested in profitable enterprises in that country and in other developing countries. When that money is repatriated to this country, it is again subject to British taxation.
Let me point out the extent to which the Commonwealth Development Corporation — a concessionary-funded organisation—is beginning to pay tax in this country. According to its annual report, in 1981 it had to pay £7·1 million in taxation; in 1982, £7·1 million; in 1983, £400,000; in 1984, £7·4 million; and in 1985, £3·8 million. That is money clawed back through taxation into the Government's hands, thereby reducing the amount available to the corporation to put into its reserves and reinvest in developments in the countries which the Treasury had agreed, when it made the investment in the corporation, should benefit from that investment.
In other words, there is the usual crazy position where, on the one hand, the Treasury gives money to the Commonwealth Development Corporation to invest in profitable enterprises overseas and, on the other, takes money from it in the form of taxation. The Treasury grabs back the money into its own hands for universal British public use. It is absurd that the Treasury should do that. The money should be left in the corporation and should not be taxed. The Treasury should allow the corporation to turn over the money for development purposes.
Let us consider the overall position of the Commonwealth Development Corporation regarding Government finances. Even if hon. Members do not take into account the taxation figures I have just cited, they will

find that, in 1981, the Government gave the corporation £16·1 million, less principal and interest paid to the Government. In 1982, the amount was £5·1 million. In 1983, it was £10·9 million; in 1984, £36·7 million and, in 1985, £13·3 million. For that, the Commonwealth Development Corporation invested an enormous amount of money. Without boring the House with the figures, I shall just say that in 1985 alone, the figure was £106·4 million. Therefore, for an investment of £13·3 million in 1985, less the taxation paid to the Government of £3·8 million, the corporation invested an amount of £106·4 million in new projects overseas. The amount was £106·4 million in the year and £907·7 million total investment and committed at the year end. On a leverage of about £9 million, the corporation invested £106·4 million. That was a good record for the Government. It could have been increased by £3·8 million if the Government had not taken the taxation from the corporation.
Obviously, a host Government will not permit the Commonwealth Development Corporation to be tax-exempt in its own country if the effect of being tax-exempt in its own country adds to the tax take of the British Government. Clearly, the host country will seek to take the money from the corporation in the form of taxation so that less is given to the Treasury in this country. That seems to be a crazy position. It does not apply to the World Bank. I believe that the Commonwealth Development Corporation's investments overseas are equally as good and are of the same category as those of the World Bank.
The World Bank enjoys total tax exemption in the host country and in the United States where the headquarters of the Bank are situated. In that way, the World Bank is able to regenerate money and make more money available for development overseas.
The taxation system of the Commonwealth Development Corporation is one of the crazier — it is not the craziest — financial operations of the Treasury and the Overseas Development Administration. I urge that we make sense of the position. We should exempt the Commonwealth Development Corporation from taxation in this country on a reciprocal basis only. That is all that I put forward. If we exempt the Corporation from tax in this country, the host country in which the CBC is operating should also exempt the Corporation from tax in that country.
I have no doubt that the Minister has been briefed by the Treasury to respond to the new clause. The observations of the Government on the work of the Commonwealth Development Corporation were made in April 1983, in paragraph 16 of Cmnd. 8857, where it comments on the Select Committee's recommendation that the corporation should be tax-exempt in this country. Let us read this little bit of bureaucratic gobbledegook:
The 1978 Act, which consolidated previous legislation relating to CDC, expressly provides that it is not exempt from tax liability"—
as if that was a justification in itself.
There are other state corporations and state-owned companies and private sector bodies whose overseas activities parallel CDC's in many respects.
Now we see the bureaucrat and the administrator at work. We cannot exempt the CDC for fear of the implications for other state corporations. There is no other state corporation that is in any way the same as the CDC. It is an absurd argument. No other corporation is charged with investing overseas, to stimulate private investment in


viable and profitable projects overseas. Therefore, that statement is absurd. I should be grateful if those who were responsible for that sentence could at least realise that hon. Members are not quite so foolish as they take us for.
Paragraph 16 continues:
Exemption would require complex legislation
There is a threat to this House.
and would be technically and practically difficult to administer.
They are dealing with one corporation, and they cannot administer that. Is that not an extraordinary recognition of failure and inability on the part of the tax authorities?
Even my own tax returns, which are not uncomplicated are much simpler than exempting the CDC from tax in this country, but, that is the sort of gobbledegook we are given in the House, and we are expected to take it. I say "expected to take it", but there has been no response from the Overseas Development Administration. So far as I know, the Treasury may have been saying something, but of course the House is not privy to those discussions.
No doubt, if I raised the matter in a late, late-night debate, or early in the morning, there would be a peremptory reply from an overtired Minister, who would say that this is our reply and just accept it. But I do not believe that we should just accept it. The paragraph continues:
The Inland Revenue keeps CDC's interests in mind when negotiating double taxation agreements. These agreements would become more difficult to secure if separate arrangements were made for individual bodies. The Government does not therefore accept that giving special exemption from UK corporation tax would, in a broader view, be to the UK's advantage.
That sort of weak excuse is not acceptable to the House or to the country. If we gave the money and Parliament voted the money to be invested by CDC overseas in profitable investments which then returned to the corporation dividends and any profit, and the capital was repaid to the Government — I have shown that in the figures — surely it would be a sensible and simple measure for the Treasury to accept the new clause CDC would then be exempt from tax in this country, and would be directed by the Minister to make certain that in investment agreements with the host countries tax exemption would be negotiated on a reciprocal basis, on the basis of the permission given by the Treasury to do so, if it also waived its concern. In that way we would make available, as does the whole Bill, additional non interest-bearing resources to CDC for work for which Parliament and the Treasury decided the money should be given.

Mr. Tom Clarke: Like the Standing Committee, the House has reason to be grateful to the hon. Member for Hertford and Stortford (Mr. Wells) for enabling us to discuss a measure that invites us to consider the role of the CDC itself. In that spirit, I shall ask the Minister some questions in the hope that they will clarify a few of the issues that stem from the new clause.
The hon. Member for Hertford and Stortford referred to the World Bank. I had not envisaged that the CDC and the World Bank fulfilled precisely the same function, and it would be interesting to know whether the Minister shares my view.
In what measure does the CDC spend public as well as private money? To what extent is the money that the CDC

invests in various projects designed to secure a return on capital, and to what extent is it in a sense competing at more reasonable rates with private capital? I am really asking what sort of animal we are talking about. Is the modern CDC a hybrid that is designed to implement Government aid and development policy without there being any financial return for the United Kingdom? Alternatively, are we talking about a corporation that has an increasingly mixed portfolio, containing both aid projects that are comparable with those in the private sector with which it may be competing?
We need to know how the Minister perceives the CDC's status and function before we can consider the proposals put forward by the hon. Member for Hertford and Stortford, and it would be helpful if the Minister could answer some of those points.

The Minister for Overseas Development (Mr. Timothy Raison): The hon. Member for Monklands, West (Mr. Clarke) seemed to use the new clause as a vehicle for raising the whole question of the function and scope of the CDC. I should have thought that that was stretching the wording of the new clause a bit far.
However, the Bill does not envisage a dramatic change in the CDC's role. Its functions and objectives are pretty well known throughout the world. The Bill is useful in that it strengthens the CDC's ability to carry out those functions, but it does not represent a major change. The CDC bears some comparison with the World Bank. After all, they are both important development organisations in their different ways. One of the characteristics of the CDC is that it operates in the developing world. But it does not operate as an aid agency pure and simple in terms of giving away money in support of good projects. It is proud of its tradition of getting a good return on investment. In other words, it is looking for financially viable projects. We do not think that that will change.
I was asked whether the CDC was spending public as well as private money. It is, of course, spending public money. It does not spend private money—that is not its job. Nevertheless, it helps the private sector. An important part of its activities involves helping the private sector by operating in parallel with, or in support of, private sector schemes. It works in partnership with the private sector. Thus, this animal will not change dramatically as a result of the Bill.
My hon. Friend the Member for Hertford and Stortford (Mr. Wells) spoke about his new clause with his customary eloquence, bringing to bear his great depth of knowledge of the CDC, which he has known for a number of years. I am always happy to listen carefully to what he says. I realise that he has a point, that he has fairly made, which is that if the CDC did not have to pay tax, it would have more money to spend on its admirable activities. That is incontrovertible, and I cannot deny it for one minute. On the other hand, in a moment I will come to the reasons why we do not think it wise for the House to adopt the new clause.
There is one point on which my hon. Friend left me a little puzzled. He said that the new clause envisaged reciprocity, that is, that this tax exemption would apply only when the countries where the CDC was operating also applied a tax exemption. I cannot see anything in the new clause that indicates that this reciprocity would be


there — it is certainly not stated explicitly. I do not understand how he thinks, if the new clause were accepted, his idea of reciprocity would be accepted.

Mr. Bowen Wells: My right hon. Friend is correct to be puzzled. When Back Benchers introduce new clauses I believe that they are at a severe disadvantage. My right hon. Friend will recall that he immediately criticises for technical deficiencies, advised by the well-briefed people in his Department, almost any new clause that is tabled. Certainly that is my experience from the Finance Bill. I therefore kept the clause as simple as possible.
I believe that my right hon. Friend and the CDC are perfectly capable of negotiating agreements with host countries administratively, saying, "Look, we are tax-exempt in Britain and we therefore expect you to give us tax exemption as the host country." It has to be an example set by Britain. We first have to take the action to exempt the corporation from the tax, and we then argue with the host countries whether they should do likewise.

Mr. Raison: My hon. Friend has given an explanation. On this occasion, it is not my advisers who have led me to believe that there is an oddity about the clause in relation to the way that he described it; it is all my own work. I am not sure that my concern is completely allayed by my hon. Friend. As I have always said, I do not believe in drawing on pure technicalities to overthrow amendments by hon. Members on either side of the House who have a real point to make. However, it seems to me, although I understand my hon. Friend's explanation, that this does not give the reciprocity to which he is attached.
Nevertheless, it is for other reasons, which my hon. Friend no doubt will regard as excessively bureaucratic, Treasury-minded and all sorts of other awful things, that I do not feel able to accept the new clause. It is not just that the tax treatment of the Commonwealth Development Corporation by the Government is in accordance with the policy of all previous Governments as far as I know—I would not rest the argument on that—but I think one is entitled to say that there is a valid distinction to be made between bodies such as Government Departments, which in a sense relate to the Crown and are immune from taxation, and other bodies that are subject to taxation.
The most obvious example that I would give of other corporate bodies subject to taxation is the nationalised industries, but there are others. These corporate bodies are treated for tax in the same way as companies in the private sector. They have an independent corporate existence, they are not mere creatures of the Government and I believe that the corporation would recognise this. In many cases, these corporations are in competition with the private sector. This may not be particularly true of CDC, but it is certainly true of other such corporate bodies. I think that my hon. Friend would be among the first to protest if public corporations automatically got some kind of privileged treatment in comparison with private companies.
Within this class of corporate bodies, there are many, such as the CDC, in receipt of concessionary funds or even subsidies from the Government. Many are in competition with private sector companies, and others such as the CDC operate overseas. I am sure that a number of those bodies would claim that they had distinctive merits and financial methods. Again, like our predecessors, we feel that it is

more just as a general concept to subject all those corporations and companies to the same taxation. If we were to exempt the CDC from that normal practice, inescapably we would have endless claims from other bodies demanding the same privileged treatment.
An important point is that it would be very odd to tackle such taxation within the purview of this narrow Bill about the CDC. It has implications for other corporations, and the House would find it a rather peculiar way of going about its business to legislate under the auspices of this Bill.
I have acknowledged that if the CDC did not have to pay tax it would have a little more money to spend on its excellent work. However, the tax is not really a major burden. My hon. Friend gave a figure for taxation for 1985 that I do not recognise as valid. I think that the figure is £1·8 million as opposed to the £3·4 million that he suggested——

Mr. Bowen Wells: It is in the annual report.

Mr. Raison: I made the figure £1·8 million or £1·9 million for 1985. I stand to be corrected, but I was looking into the matter a few moments ago and I believe the figure to be £1·8 million. Against that, during the financial year 1985–86 the CDC received £41 million in concessionary loans from the aid programme, which is obviously a much more substantial sum. Therefore, the taxation does not really impose an onerous burden. In the discussions about the Bill, the CDC did not say to me that it wished the Bill to be used as a vehicle to remove the burden of taxation. I have not been pressured on that point.
If the House thinks for a moment or two about the sheer common sense of the matter, it will appreciate the force of the argument that this Bill is not really the way to tackle the taxation of such corporate bodies. I therefore ask the House to reject the new clause.

Mr. Bowen Wells: I thank my right hon. Friend for explaining why he will not accept the new clause, and I understand his reasons. He has to deal with the Treasury on this issue and, as he said, the Treasury is obviously frightened that there would be implications for other corporations. I am glad that we have had this opportunity to emphasise that, as parliamentarians, we do not agree with the Treasury making absurd and unnecessary complications in what is essentially a simple issue. I do not think that my right hon. Friend believes that it should do that, but he cannot say that and I understand why.
My right hon. Friend suggested that he wanted to treat the CDC as a nationalised industry. Are the ODA and the Treasury consistent in treating it as a nationalised industry in terms of investigation, monitoring and interest and capital repayments? In fact, their treatment is wholly inconsistent. If my right hon. Friend agrees that the CDC should be treated as a nationalised industry throughout the Civil Service, the CDC and the ODA budgets would benefit enormously. I shall not dwell on that point because it is one on which I have not been fully briefed. However, if my right hon. Friend investigates the matter, he will find that there are serious inconsistencies in the way in which the Treasurey treats the CDC.
My right hon. Friend argued that he did not want to include taxation in the purview of the Bill.
10.30 pm
The Select Committee made recommendations about the CDC in 1982, yet the House has not debated the


corporation in the intervening period. Indeed, although it has been usual for the chairman of the CDC to have a motion proposed in the other place so that Parliament could discuss the CDC budget and the return on its money, that has not happened for a considerable time. Nor has a relevant Bill been promoted by the ODA or the Minister.
Back Benchers do not have the opportunity to influence Government policy decisions other than by trying to tack provisions on to Government measures. In Congress, such tacking on takes place all the time. In this country many measures would be improved if, when introduced, all manner of provisions could be tacked on to them. In a way, that is happening with this Bill in that it provides additional resources to the CDC, and I congratulate the Government on taking that step.

Mr. Tom Clarke: I found it necessary to ask the questions that I put earlier precisely because we have not had a debate of the type to which the hon. Gentleman refers. I was anxious to discuss the new clause in the context of the Government's thinking about the CDC. My impression so far in the debate is that the Government view the CDC as being between the World Bank and a nationalised industry.

Mr. Deputy Speaker (Sir Paul Dean): Order. I have permitted a wide debate to take place, but I remind hon. Members that we are discussing a new clause which deals with taxes and imposts. We cannot debate the whole of the CDC in discussing the new clause.

Mr. Wells: I accept the wisdom of your ruling, Mr. Deputy Speaker, and I hope that the hon. Member for Monklands, West (Mr. Clarke) will take part in the Third Reading debate, which I confidently expect will succeed the Committee and report stages of the Bill this evening.
I hope that I am in order in referring to the World Bank, because the new clause relates to taxation treatment and the treatment of the CDC for tax purposes is different from that applied to the World Bank, although the only distinction is that the CDC undertakes the direct management of projects whereas the World Bank does not. In every other way, the CDC's operations are parallel to those of the World Bank. It is a smaller organisation which does its investment bilaterally— and, in my view, more sensitively and more effectively — but it is very similar to the World Bank.
That is why it should receive the same taxation treatment, both in respect of the host country in which the investment is made, and in this country, from which the original investment comes. To do other than that is ridiculous. The general public would agree if they were told, "Here is the Treasury giving money for development overseas, yet when the money returns it is taxed."
The Minister has explained his position and we, as parliamentarians, have explained why we do not accept the bureaucratic arguments he has been forced to adduce. We have brought the issue to the top of the filing tray, where I hope it will stay. I am confident — because of the existence of this measure—that the civil servants will think again, and I hope that before long the Minister will introduce a Bill to implement what we have suggested tonight. For the time being, I beg to ask leave to withdraw the motion.

Motion and clause, by leave with drawn

Clause 1

AMENDMENTS OF COMMONWEALTH DEVELOPMENT CORPORATION ACT 1978

Mr. Deputy Speaker: I now call the hon. Member for Hertford and Stortford (Mr. Wells) to move amendment No. 1.

Mr. Bowen Wells: I need not delay the House for long in dealing with this sensible new clause, the arguments for which, relating to immigration, were rehearsed in the report of the Select Committee on Foreign Affairs in 1982. One of the problems in the present Bill——

Mr. Raison: On a point of order, Mr. Deputy Speaker. I believe that my hon. Friend is under a misapprehension. I understand that you have not selected new clause 2 which deals with immigration.

Mr. Deputy Speaker: We are dealing with amendment No. 1.

Mr. Wells: On a point of order Sir Paul. I thought that I had tabled new clause 2.

Mr. Deputy Speaker: Order. New clause 2 has not been selected. I have called amendment No. 1 and the hon. Gentleman must speak to that amendment.

Mr. Wells: Further to my point of order, can I have an explanation of this, if not now, at some other time?

Mr. Deputy Speaker: The hon. Gentleman knows that it is not usual for the Chair to give explanations about selections. If the hon. Gentleman is puzzled and would like to have a private word with me at some other time, I will try to enlighten him. We are now dealing with amendment 1.

Mr. Wells: I would be grateful for such a discussion. I now beg to move amendment No. 1, in page 2, line 18, after 'may,', insert
'after consultation with the Corporation and'.
This was the subject of discussions between my right hon. Friend the Minister and members of the Committee. It involves whether we should allow the Minister the power to give grants to the CDC. The CDC has never been eligible to receive grants from the ODA. It has been financed through loans. Many people have criticised that as inappropriate, as the corporation is risk-taking and should therefore be financed by equity capital and not loan capital. It has battled for many years against that disability. It has now generated its own funds, which enable it. in effect, to have equity capital, although the Government did not give it such equity capital.
An equity and loan arrangement for the corporation would he the correct way in which to tackle the issue. I made that point in Committee. That would, of course, mean a reorganisation of the corporation's finances and balance sheets, but I do not see why my right hon. Friend the Minister should not have thought that that was a sensible way in which to solve the problem in the Bill. None the less the Minister has not done that.
The Minister has taken the power to give grants. That could fundamentally alter the relationship between the ODA and the CDC. I would like my right hon. Friend to explain what he has in mind to do with the grants that he is asking the House to give him the power to bestow. I believe that that power could do what my right hon.


Friend does not really want to do. It could ruin the CDC in its present form and reduce it to a profitless and relatively useless organisation, in the day-to-day control of the ODA officials.
I accept that the purpose of the powers could be to increase the resources of the corporation. I would say "Hoorah" to that. However, why do we want to give grants rather than loans? My right hon. Friend said in Committee that he wanted to reduce the amount of money paid out of the ODA budget to the CDC by giving it grants. Grants are manifestly more valuable than loans. How much more valuable is a question of judgment and of arithmetic to which we will not be privy. Grants could be used to affect the CDC's core funding. That would affect the independence of the CDC board.
My right hon. Friend and I know that, if the ODA gives grants, the ODA will therefore have to require the CDC to apply for grant money. If it is granted, the ODA must issue the grant on the basis of a prospectus or proposal put up by the CDC. It will then be incumbent on the ODA to ensure that the grant money is used for the purpose for which it was granted.
The Foreign Affairs Select Committee will ask my right hon. Friend what he has done with the grant money that he has given to the CDC. The relationship between the ODA and the CDC, which is an arm's length relationship at the moment, will be destroyed. The CDC board's independence will be diminished and the ODA will take over. My right hon. Friend and the ODA have given me every assurance that that is not their intention. I believe that to he true, but the possibility of what I have described exists. That fear is certainly shared by the management and board of the CDC.
The arrangement will affect the discipline that the board can exert over its management in the field. Because the management does not have to repay the capital and the interest, the management will be able to make loans and investments which are below the standards that the CDC now expects. That could lead to the CDC being unable to repay its capital and interest and unable to invest in successful projects overseas. The management of the companies established by the CDC will have a diminished discipline to make a proper return on capital. The arguments with the host Government to ensure the profitability of a company will be weakened, and the necessity to remit funds from the host country to Britain will also be diminished.
There are some positive aspects to making grants, which we all accept. My right hon. Friend can give the CDC grant money in support of projects in which it has invested, such as roads, education, health and housing to meet costs which, in a developed country, a normal project does not have to bear. It means that my right hon. Friend can give technical co-operation assistance to CDC projects. Trained personnel can therefore assist projects by training management in technical resources and undertake investment in agricultural training centres in Swaziland, for example, in research. I applaud all of that, but I should like my right hon. Friend to spell out how he intends to use the proposed power.

Mr. A. J. Beith: The hon. Member for Hertford and Stortford (Mr. Wells) has distinguished himself by speaking more often and at greater length on this Bill than the two Opposition parties added together. I do not intend to imperil his record by

speaking at great length. I listened to his argument at several stages of the Bill. I was not a member of the Committee and, although I read the report of the Committee proceedings and noted his comments, I am still not convinced. The picture that the hon. Gentleman conjures up is one of the Overseas Development Administration smothering the CDC with grants to such an extent that the officials of the CDC look up with horror at the sight of yet another gift-bearing emissary from the ODA coming to the door with more grants and more control. In my wildest dreams I cannot conceive of this situation coming about.
10.45 pm
The hon. Gentleman may be right in his analysis of what might happen if anyone were to undertake such a smothering exercise, because lie well knows the workings of the CDC. No one in the House knows them better than he does, and no one in the House would dare to argue in such detail about them. I cannot envisage a situation in which the ODA would be in a position to make such extensive dispersals as would pose a threat to the CDC, nor can I imagine that the CDC would be forced to accept such largesse if it was genuinely worried that its independence was being threatened. I agree with the hon. Gentleman that a situation may arise in which it is pressured to accept a grant instead of a loan for a specific project. But if the situation was as difficult as he described, it would be open to the CDC to resist the blandishments.

Mr. Bowen Wells: Without the amendment that I have suggested, the CDC will have no option. If the amendment is accepted, the Minister at the time will have to consult the CDC. I should be grateful if the hon. Member for Berwick-upon-Tweed (Mr. Beith) could agree to the amendment. It would have a humble and limited effect: the Minister would have to consult the CDC before he gave it a grant.

Mr. Beith: The Minister may well find something wrong with it, although I cannot imagine that the ODA would give a grant to anybody without first consulting him about it. I would be the first to suspect Government Departments of not consulting. I have frequently criticised them for failing to consult people. But the one Department which usually consults is the one which is proposing to give money to somebody. Not only does it consult, but it inquires in the various ways that the hon. Gentleman has mentioned.
The hon. Gentleman may have a point, but he has not convinced me. Even if my wildest dreams are realised and an alliance Administration has stepped up the annual rate of overseas aid to meet within five years the United Nations target and disbursements are being made thick and fast in pursuit of this policy, he has not convinced me that one of the consequences would be that the independence of the CDC would be greatly jeopardised because of the number of grants being made to it in preference to loans. Not even my imaginings about Ministers who may succeed the present Minister lead me to share the fears expressed by the hon. Member for Hertford and Stortford. I would, of course, wish the Minister to consult with the CDC before making grants, and I should be very surprised if he did not do so.

Mr. Jim Lester: I support the amendment. We all recognise the value of the CDC and the


contribution that it makes. If there is any suspicion that by changing the formula its independence will be threatened or that it will feel in any way less able to operate in the same way as it has operated in the past — an operation which has been widely acclaimed and supported by every investigation of the House into its affairs—then the acceptance of a minimal amendment which relieves that suspicion is well worthwhile.
I do not necessarily share the analysis of the situation by my hon. Friend the Member for Hertford and Stortford (Mr. Wells), but if the amendment is accepted it will reinforce the independence of the CDC and ensure its ability to make that contribution to development that we would all applaud and support.

Mr. Raison: It has been useful to have this short debate, and it was right that my hon. Friend the Member for Hertford and Stortford (Mr. Wells) should have put forward the amendment. We discussed this matter at fairly considerable length in Committee, and I do not think that I shall be expected to explain why we are introducing this grant provision element in the Bill. However, my hon. Friend asked one or two specific questions about that aspect and I shall briefly respond to him.
As I said in Committee, the introduction of the grant scheme can give useful support to the CDC — that is what the whole thing is about. It provides a flexibility in ways of financing the CDC as well as the opportunity to provide the parallel or supporting operations to which my hon. Friend has referred and which he favours.
We certainly do not see in the Bill a drastic change in the Government's attitude towards the CDC. We have had a long and friendly association with the CDC in our joint business of assisting and investing in developing countries. We fully recognise that the CDC must fund and invest in projects that show a good financial return and are economically sound. We have no desire to relax the financial discipline which has been one of the good features of the CDC's management. I certainly am not trying to take away from it its reputation as an aid agency of a kind which nevertheless manages to operate against strict commercial standards. That has been its proud boast, and I hope that it will continue to be its proud boast. I have no desire that things should be otherwise.
Nor do we in the ODA desire to engage in day-to-day interference in the management of the CDC. We have confidence in the management, and it is not the job of the ODA to run the organisation. It is the job of the CDC's board to run its organisation in accordance with sound investment principles, but again operating within the developing world.
Of course, in the last resort, we have responsibility for the CDC and that has always been accepted. It remains a statutory body financed by concessional funds from the aid programme, but we do not want a day-to-day interference in its management. I am grateful to the hon. Member for Berwick-upon-Tweed (Mr. Beith) for recognising that it is not our desire to do any of those things.
However, I recognise that it is important that if we implement this grant-giving power we should do so in conjunction with the board of the CDC. I made it clear in Committee that that was our intention, but my hon. Friend the member for Hertford and Stortford has put

forward an amendment which would write that into the statute. I am happy to accept my hon. Friend's amendment, and I hope that the House will agree to it.

Amendment agreed to.

Motion made, and Question proposed, That the Bill be now read the Third time.

Mr. Tom Clarke: The Bill is essentially a short technical measure. Despite some of the reservations which the Opposition have about what appears to be the Government's extension of some of their monetarist philosophies into the field of development—a view most eloquently expressed by my hon. Friend the Member for Vauxhall (Mr. Holland)—several times in Committee, the Minister will be pleased to hear that there will be no attempt on our part to obstruct the Bill's passage through the House.
In Committee the Minister attempted to outline the main issues in the Bill as he sees them, and I am sure that he will do so again this evening. Four main points arise from the Bill. First, the CDC will now be able to borrow on the financial markets. Secondly, it can do so in more than one overseas country. Thirdly, the Government can guarantee borrowing, and, fourthly, the Government, as we have heard, can make grants. I hope that that is a fair summary of the main points of the Bill, but I am sure that the Minister will point out any omissions from that fairly quick summary.
The Bill naturally reflects the substantial and worthwhile development of the work of the CDC. It recognises that in trade and technical assistance underdeveloped countries are increasingly able to help one another and are not solely dependent for aid and technical assistance on the developed world. While we accept our own responsibilities in these matters, we welcome this recognition of co-operation and co-ordination of effort among Third-world countries.
In another place Baroness Young gave us an example of the kind of project which the Bill would seek to facilitate. She mentioned that the CDC has provided funds for Shelter Afrique, a Kenyan-based organisation which, in turn, supplies finance for housing activities in a number of countries in the continent of Africa. Because of present legislation, the CDC has to confine the use of finance to Kenya itself. When the Bill is enacted, the CDC could, as I understand it, if it wishes, provide finance for Shelter Afrique to support housing developments in other countries. That is an example of how the CDC would be allowed to extend its activities.
In our discussions this evening reference has been made to the World bank. It is not my intention to delay the House in its consideration of the Bill. However, some of the World bank's attitudes—I know that this is a matter for a more comprehensive debate — especially about conditionality, do not lend themselves to the philosophy which we would expect the CDC to adopt. Therefore, although I am convinced, as the Minister has said, that there are some similarities, I hope that in time we will see that there are considerable differences in approach as they affect individual countries.
One of the saddest commentaries of our times was contained in Baroness Young's view that some of those projects would not easily attract private sector finance from those who are looking for a quick profit. That may have influenced the Government and the Minister to take


the view that they have and that is enshrined in the Bill on the question of grants. Certainly it was a major matter in Committee. The hon. Member for Hertford and Stortford (Mr. Wells) expressed a strong view, tonight, as the House would have expected. He took the view that these grants should not be used as a device to reduce loans. I think that it is fair for me to point out that my hon. Friend the Member for Vauxhall also saw many aspects of the Bill as a Government attempt to reduce the public sector borrowing requirement. He said that he would be watching that very closely.
I have to repeat the question put by my hon. Friend the Member for Vauxhall in Committee:
Will the Minister give an assurance…that the CDC will never get a grant from his Department or from the Exchequer simply to subsidise the higher interest rates that would have to be paid on these Euromarket loans?" — [Official Report, Second Reading Committee, 26 February 1986; c. 7.]
He used the word "Euromarket" in the general sense of global financial market loans. As I have said, we shall be watching that aspect of the legislation very closely.
I come briefly to the work of the CDC in the context of the Bill. The Bill gives us the opportunity as it did the Committee, to talk about the efforts of the CDC and, in so doing, to acknowledge the splendid work which that organisation has done and will no doubt continue to do. It is an organisation which is widely respected, not only in the House but throughout the United Kingdom and, I think it is fair to say, in the Commonwealth itself. I had the opportunity, with some of my hon. Friends, to visit at least one of its projects in Papua New Guinea and again in Swaziland. I think that the CDC deserves the greatest possible praise for its efforts in bringing investment, employment and prosperity to those parts of the world, and long may those efforts continue. That is what we seek to encourage. However, we are also bearing in mind the need for greater emphasis on agriculture and rural development, and the involvement of grass roots organisations which articulate and serve the needs of local people. That is also extremely important.
Those views were reflected in the last annual report of the Commonwealth Development Corporation, in the remarks of the chairman and in the management report. In view of our concern about Africa, I wish to refer briefly to the chairman's remarks whih give a good indication of the Bill's objectives, especially for the poorest parts of the Commonwealth and the world. The chairman said:
Africa has perhaps suffered more than any other area from the combination of falling commodity prices, overambitious domestic investment policies and debt burdens made more weighty by the long period of high interest rates.
Unfortunately, when we compare this year's annual report with that for last year we see that there are still aspects of crisis for the Third world. We see the contrast between 1984 and 1985. Drought has been alleviated a little, but the world debt problem is as great as ever. I know that the Minister would want the Bill to be effective in trying to deal with the many problems that arise from the debt crisis which the world faces. Certainly it would be nice to see the whole British aid programme expanding at the same rate as the CDC programme, and to see the same priority and emphasis being given to these issues.
We must consider the CDC and the Bill in the context of current and, perhaps, even future debt problems. The CDC's sense of urgency regarding debt is correct, reflecting the critical nature of the issues facing developing countries, especially those in Africa. One of the aspects of

the Bill and of our discussions both in Committee and in the House which delights me is that we have started again to use the word "Commonwealth" with some pride. Some of us were disappointed during our debate on South Africa when the Commonwealth seemed to be frowned on by a minority of Conservative Members. It is important that the Commonwealth should be seen as playing an important part in offering a solution to development problems, while at the same time the work of the CDC expands successfully into non-Commonwealth areas.
The Minister would be somewhat astonished if I did not at some stage refer, albeit briefly, to the problems of the Mindanao project in the Philippines. My views are on record in Committee, and I do not withdraw anything I said there. However, I am sure that all hon. Members will agree that it is most important that all hon. Members, including, I hope, the Minister, who seems to find reasons for disagreeing when most hon. Members appear to be uttering the obvious, learn the lessons from that experience. If we have, in the spirit of constructive criticism which I have endeavoured to offer both this evening and in Committee, surely we can look to the future with confidence.
The guidelines given to the corporation some years ago called for emphasis on helping poor countries —presumably that is what the Minister envisages in this legislation — with particular priority for investment in the projects concerned with the renewal of natural resources. Therefore, it was a little disappointing to find that disbursements in 1985 totalled £82·2 million, sharply down from the 1984 figure of over £109 million, of which only 62 per cent., as against 82 per cent., went to poorer countries.
Bearing in mind the future work of the CDC, I ask the Minister three brief questions. First, on the status of the CDC, does he see it as a disburser of British aid and essentially humanitarian, or as a private development corporation? Secondly, will he encourage it to try to resolve whether it is working on behalf of communities, or necessarily with Governments and was not this one of the issues posed by the Mindanao project? Thirdly, is there not a case for the CDC to renew its models of agricultural development, which might have been progressive in the 1960s, but are open to criticism today?
The potential contribution of CDC to enabling people throughout the world to lead decent lives without fear of hunger or poverty, and participating in the development of their communities, is immense. Both the CDC and the House, recognise the needs of Africa for long-term solutions even more than immediate injections of relief. It was George Orwell who said some time ago that we might expect to live in a world where one half of the universe saw the other half on television suffering or dying from starvation. The stark reality of that prediction is that it was an understatement. One third of the world is watching two thirds of humanity on the verge of starvation or worse.
When the late John Strachey signalled the introduction of the legislation that led to the CDC being set up, he said:
We believe that this new departure— and it is a new departure — is essential because the world would not tolerate much longer the leaving fallow of undeveloped areas".—
[Official Report, 6 November 1947; Vol. 443, c. 2018.]


That is true, and our great regret is that 40 years later, we have still not come near to realising the objective that he set or the achievements that he and the House would have liked.
I give a broad, if cautious, welcome to the Bill. We are grateful for the vision that those responsible for the CDC have provided in the past for future generations. In that spirit, the Labour party will not impede the Bill. However, we shall monitor its progress, when enacted, with the greatest possible care.

Mr. Bowen Wells: I shall not detain the House for long. It has already been indulgent of my interests in this subject. However, I make it clear that I welcome the Bill wholeheartedly. It is a response to an Adjournment debate that took place in 1982, with my hon. Friend the then Financial Secretary to the Treasury, at about 6 am, during the proceedings on the Consolidated Fund Bill. The argument put by him was that the CDC was subject to the PSBR requirements that had been firmly established, and were administered, by the Treasury, and that even if the CDC were to borrow overseas, invest that money overseas, and receive repayment overseas, that was a borrowing that had to count as part of the PSBR.
That manifest absurdity is being put right in the Bill enabling the CDC to borrow and lend overseas, and ensuing that that does not have an impact on the PSBR. This is an ingenious way to have managed to do this. I am sorry that the time of officials and the House has had to be taken to invent this way to get round economic dogma and definitions. However, the fact that ODA and Treasury officials and my right hon. Friend the Minister for Overseas Development have spent that time upon it demonstrates their commitment to the Commonwealth Development Corporation and their concern to provide the necessary resources with which to expand its very valuable work overseas.
The whole of the corporation's finances are involved in a mix of ODA financial receipts at concessionary rates of interest and borrowing on commercial terms, thus making more money available for the essentially commercial, profitable and viable investments that it is making overseas. I welcome that development. It is the way in which development can take place in the most sensible and disciplined way possible.
I pay tribute to the CDC's results this year. They emphasise my belief that the CDC is of unique benefit to countries overseas. I do not share the fears of the hon. Member for Monklands, West (Mr. Clarke). One only has to look at the results of the CDs commitments this year, which amount to about £106 million. They will create 12,800 new permanent jobs overseas. I should have thought that all right hon. and hon. Members would welcome that result. A livelihood will be provided for 94,200 small and impoverished farmers. I wish it were in Mindanao where some of the poorest and most deprived people in the world live. I do not share the apprehensions of the hon. Member for Monklands, West, other than his apprehensions about the human rights difficulties that face those small and impoverished farmers. I believe that the CDC's efforts will improve their standard of living and enable them to withstand that kind of oppression.
About 210,000 hectares have been brought into cultivation or have been rehabilitated, either as estates or as small farmer or outgrower projects, with plantings of oil, palms, rubber, maize, sunflower, rape, cotton, beans, hardwoods, coffee and tea. Those are major investments in basic commodities that are produced for export. They will provide foreign exchange which will enable the standard of living in those countries to he improved. That investment will result in orders in the United Kingdom. That, too, is important. The orders will benefit this country, just as economic development worldwide will benefit this country. At least £19 million worth of orders will be generated during the implementation phase of these projects. The result in foreign exchange earnings for the host countries is very important.
The ability of countries overseas to import essential spare parts and improve the infrastructure will result in foreign exchange earnings for the host countries of at least £270 million per annum. That is a very proud record. We can all take pride in it. My right hon. Friend is entirely justified in his support for the CDC and in his desire to increase the amount of money that is available to it, and he deserves our wholehearted support.

Mr. Beith: On behalf of the alliance, I welcome the Bill without any reservations. Its provisions are wholly desirable. They remove irksome and unnecessary restrictions upon the work of the Commonwealth Development Corporation. The Government are to be commended for introducing the Bill. I cannot, however, commend the Government's business managers. If anything has delayed the Bill, the activities of right hon. and hon. Members have not delayed it. The Bill had its Second Reading on 26 February, but only now have right hon. and hon. Members been given the opportunity to debate it on Third Reading.
One might think, having heard the comments of the hon. Member for Monklands, West (Mr. Clarke), that the proceedings in Standing Committee involved a protracted and deep dialectic about the Government's monetary policies, but the entire proceedings in Standing Committee lasted 40 minutes.

Mr. Tom Clarke: That is not so.

Mr. Beith: That is indeed the case. I have the text in front of me. The proceedings began at 10.30 and ended at 11.10 am, which by my reckoning is 40 minutes. Neither I nor the hon. Member for Monklands, West was present.

Mr. Tom Clarke: If the hon. Gentleman does his homework he will find that there were two sittings. The first lasted a great deal longer.

Mr. Beith: That is not so. The hon. Gentleman has not done his homework. There was a Second Reading Committee on the Bill, of which he and I were members, which lasted for 1 hour and 40 minutes. There was a Standing Committee which sat once for 40 minutes.
I stand by the comments I made originally. Neither the Second Reading Committee debate nor the Standing Committee debate was protracted, and rightly so. I make the point merely to underline that the general wish of hon. Members has been to get the Bill on to the statute book as quickly as possible. If anyone is to blame for not doing so, it must be the Government's business managers. The


contents of the Bill well deserve the commendation of the House. I have a rare opportunity to welcome a Bill without any reservations whatsoever.

Mr. Raison: I rise bathed in the bonhomie which the hon. Member for Berwick-upon-Tweed (Mr. Beith) has just expressed. I had intended to draw to the attention of the House the fact that in an earlier intervention he said that, in his wildest dreams, he could imagine a doubling of our GNP percentage for aid. In other words, he was saying that the Liberal party's official position corresponds with his wildest dreams, which does not quite have a ring of conviction about it. However, I shall not tease him because he has been extremely helpful to us this evening. I thank him for that. I also thank other hon. Members who have contributed to the passage of the Bill.
I think that we have given the Bill a reasonable amount of attention. It would have been a pity if the Bill had simply gone through on the nod without any discussion, because it concerns an important matter. The future of the Commonwealth Development Corporation is important. I, the Government and, I am glad to find, the House have great respect for the corporation. I do not begrudge the minutes in Committee and the short number of hours on Second Reading that have been spent discussing it.
The hon. Member for Monklands, West (Mr. Clarke) welcomed the Bill. I am grateful to him for that. I think that at one point he described it as an extension of our monetarist philosophy. I did not quite know what he meant by that. The introduction of a grant-giving power is not normally thought of as a monetarist activity. Whatever else one may have to say about it, no doubt, deep down in the hon. Gentleman's subconscious, something is stirring which he is about to release.

Mr. Tom Clarke: When the right hon. Gentleman reads Hansard, he will see that I was referring to the views of my hon. Friend the Member for Vauxhall (Mr. Holland). I thought it right that those views should be placed on the record.

Mr. Raison: The hon. Member for Vauxhall (Mr. Holland) would see monetarism under any stone or in any corner that he chose to look. I am only surprised that the hon. Member for Monklands, West should see himself in the role of the mouthpeace of the hon. Member for Vauxhall who is, if I may say so, a different kind of creature from himself.

Mr. Tom Clarke: And from the Minister.

Mr. Raison: And from myself also. I claim no identity with the hon. Member for Vauxhall.
As the hon. Member for Monklands, West said, the Bill enables the CDC to borrow and operate in overseas countries. As my hon. Friend the Member for Hertford and Stortford (Mr. Wells) said, it can do so without recourse to the public sector borrowing requirement. That gives a greater flexibility. I think that everybody would welcome that. Under the Bill, the Government have the duty to guarantee such borrowing. The Bill introduces the grants facility which we discussed earlier. I think that all those measures add up to greater scope for the Commonwealth Development Corporation.
The hon. Member for Monklands, West referred to Shelter Afrique. I think that he accepted that one of the merits of the Bill is that it could permit support for such

an operation, as my noble Friend Baroness Young said in the other place. That is another advantage. The hon. Gentleman made some comparisons between the CDC's operations and World Bank conditionality. I believe that what the World Bank is doing, in trying to bring about structural adjustment in a genuine attempt to get to the root of the economic problems of Africa and other countries, is all to the good. I very much support that. The CDC is a somewhat different operation in that respect from the World Bank. I hope that the CDC will be used for real development. That is what the Bill is about.
The hon. Gentleman asked me three questions. He asked me whether I see the CDC as a disburser of humanitarian aid or a private corporation. I do not see it as either exactly. It is not exactly a private corporation. It can work in partnership with and give strength to the private sector. One of the healthiest aspects of the United Nations special session on Africa a few days ago was the recognition of the importance of the private sector.
The CDC is not exactly a humanitarian aid organisation. It is operating in developing countries, contributing to the strengthening of their economies, especially important sectors such as agriculture. It is not exactly a charitable organisation. It is trying to contribute to fundamental development.
As to whether it works with communities or with Governments, in operating in a Third world or other country, one must recognise that they have legitimate Governments. One may not like them, but they are Governments. It is difficult to waltz into a country and say, "We shall forget about the Government and do our own thing." Of course, the CDC is concerned to do things that are worth while in the economic and social development of the places in which it operates. That is an important part of aid strategy generally and the CDC contributes to it.
The hon. Member for Monklands, West raised the vexed question of Mindanao, and I understand his concern. We discussed the issue at some length in Committee and I cannot add much to what the hon. Gentleman has said. Since the change of Government in the Philippines, pressure from certain voluntary organisations on that matter seems to have abated. I do not know whether that is because they find the new regime more to their taste, as clearly many people do. Perhaps there are lessons to e learnt from this affair. However, the CDC can claim that jobs and prosperity are being generated in that area, and that, should not be dismissed.
The hon. Member for Monklands, West asked whether the CDC would review its models of agricultural development. The corporation is always prepared to bthink about the most effective ways of operating. It brings to that consideration enormous practical experience. The CDC works in the field. We are perhaps all tempted at times to pontificate about developments, but the CDC is the body out in the field. The way in which it applies its expertise is very much to the good.
I think that I have covered the main points raised in this short debate. We are right to be proud of the CDC as an organisation. As my hon. Friend the Member for Hertford and Stortford (Mr. Wells) said, the Bill will strengthen the CDC in its activities. I commend it to the House.

Question put and agreed to.

Bill accordingly read the Third time, and passed, with amendments.

Land Registration Bill [Lord]

As amended (in the Standing Committee), considered.

Order for Third Reading read.—[Queen's Consent, on behalf of the Crown, and Prince of Wales's Consent, on behalf of the Duchy of Cornwall, signified].

The Solicitor-General (Sir Patrick Mayhew): I beg to move, That the Bill be now read the Third time.
This short but technically complex Bill gives effect to the Law Commission's report on land registration, No. 125. Its purpose is to simplify and modernise three aspects of the law on land registration which seemed to the commission in need of reform—the conversion of title, the registration and protection of leases and the method of determining the priority of dealings in certain equitable interests in registered land.
At this time of night, I do not think that it would be profitable to detain the House with a detailed explanation of the Bill's provisions. It is enough to say that it has been generally welcomed as a useful measure of law reform which should make the system of land registration easier to understand and operate. I commend the Bill to the House.

Mr. Nicholas Brown: Legislation arising from Law Commission reports has a small cult following in the House. The Solicitor-General and I emerge into the Chamber, usually very late at night, to practise our rites. I should like, in that spirit and with your indulgence, Mr. Deputy Speaker, to offer my congratulations and those of my right hon. and learned Friend the Member for Aberavon (Mr. Morris) to the Solicitor-General on his elevation to the Privy Council. As someone who was born in the Solicitor-General's constituency, may I say that I hope that he will take a pride in being thus honoured.
The Land Registration Bill is not contentious, as anyone who has studied the Official Report of the Second Reading Committee and the Standing Committee will readily confirm. The Solicitor-General and I heard in Committee this morning on another matter some hard words about the Law Commission, which were unjustified and came from Poujadist elements.
It is traditional on these occasions to thank the Law Commission. For myself, that is not just a matter of form. In my modest Front Bench responsibilities, I have had an opportunity, of necessity, to gain an insight into the Law Commission's work. My appreciation has grown with my understanding of it and my thanks are sincere.
The Bill is not contentious or wide in its scope. It is a useful and practical reform to simplify and update the law relating to lease registrations and the byways of registered land. I am pleased to commend its passage to the House.

Question put and agreed to.

Bill accordingly read the Third time, and passed.

Dornoch Firth (Crossing)

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Durant.]

Mr. Robert Maclennan: In the past week, two parliamentary answers have been given concerning the Dornoch Firth crossing, which is in my constituency. One was an answer to my question by the Minister of State, Department of Transport, and the other reply was given to the hon. Member for Moray (Mr. Pollock).
The latter answer was given by the Secretary of State for Scotland. He said that it was his intention to proceed with plans to construct a road bridge over the Dornoch Firth. He said:
Subject to the availability of finance and the satisfactory completion of statutory procedures, construction of the approach roads is planned to begin in financial year 1987–88, with construction of the bridge structure to follow in 1988–89. My Department will be holding a design-and-build competition for the bridge, the first stage of which will be to issue an invitation at the beginning of July to selected competitors for the submission of design proposals." — [Official Report, 18 June 1986; Vol. 99; c. 532.]
That reply was, I suppose, encouraging, because it marked another stage in a very long saga that goes back to the mid-1960s when it was first proposed to construct a road bridge across the Dornoch Firth, as part of a scheme to bridge the three firths north of Inverness and to greatly shorten the transportation route between the north coast and the markets of the south.
The answer by the Minister of State related, however, to the possibility of a rail bridge being constructed across the Dornoch Firth, in conjuction with that road. That answer was negative in that the Minister indicated—it is important that I repeat these words too in the context of the debate—that the British Railways Board was not proceeding with that proposal. The Minister said that no detailed request had been made for special funding. He understood that British Rail had been considering the case for a rail crossing of the Dornoch Firth and it had had discussions with the Scottish Office and various interested bodies.
I wish to draw attention to this part of the reply. He understood that British Rail:
cannot make a financial case for funding the scheme wholly themselves; nor can it show that sufficient additional funding would be available from other sources."—[Official Report, 17 June 1986; Vol. 99, c. 481.]
Turning to the significance of the link between those two answers, it is right to sketch in the history of the project and, indeed, the projects. So far as I am concerned, they have dogged my every step in the House of Commons over a period of close on 20 years.
On 22 July 1969, Dr. Dickson Mabon agreed to my request that a feasibility study of the Dornoch Firth should be made. That, I think, was one of the earliest references to the matter in the House. On 9 May 1972 in an Adjournment debate on the subject I deployed the arguments in favour of the road crossing at some length, and received a wholly negative reply from the then junior Minister at the Scottish Office, now the Secretary of State for Defence. I petitioned the House on behalf of my constituents in 1973, and pressed the Highlands and Islands Development Board to conduct an economic survey of its importance. In October 1975, that survey was completed. It was not until 1978 that Lord Kirkhill, then


the Minister of State, Scottish Office, announced, on 10 March, the then Labour Government's decision in principle to build the bridge.
Following the change of Government in 1979, however, once again the whole process went into slow motion. The then Parliamentary Under-Secretary of State, now the Secretary of State for Scotland, the right hon. and learned Member for Edinburgh, Pentlands (Mr. Rifkind) said on 17 June 1981, in answer to a question from me, that the earliest date for the crossing being constructed would be the financial year 1985–86. That is almost exactly five years ago. I draw attention to the considerable slippage that there has been in the Government's best hopes since that time.
There was a more encouraging response from the Parliamentary Under-Secretary of State for Scotland, the hon. Member for Argyll and Bute (Mr. MacKay), whose presence at the debate I particularly welcome as a Member of Parliament representing the Highlands, if not as the most munificent of Ministers. In July 1984, in the course of a debate in the Scottish Grand Committee, he told me that plans were going ahead as fast as possible, and it was hoped that work might begin in 1986. We are well into 1986, and we are now told by the Secretary of State for Scotland in a written answer of 18 June that work will not begin in 1986 and indeed, we shall be very lucky to see any work begun before 1987–88. We are told that that is contingent upon funds being made available.
I hope that in replying to the debate the Minister will have something to say about the funding of the road bridge because that is a matter of considerable importance. There are too many escape clauses in the Secretary of State's written answer to me. I fear very much that there may be further slippage in what has been a sorry tale of delay from the beginning.
I turn now to the question of the associated rail bridge. This is a much more recent development. It is true that it was mooted in the initial economic study conducted by the Highlands and Islands Development Board back in 1975, and it did not find favour with the consultants who were employed by the Highlands and Islands Development Board at that time. The beginning of the modern proposal for the association of the rail bridge I think could be dated from the announcement of the then manager of British Rail, Scottish region, Mr. Christopher Green, on 17 January 1985, at a press conference held in Inverness following his first meeting with the Highlands Regional Council and the Highlands and Islands Development Board, that this was a proposal that British Rail favoured. In his statement he waxed lyrical about the prospects for the project and said that Sutherland could become a little Switzerland if it went ahead. He warned that if the major opportunity that he described was missed, the hour's difference between road and rail times could prove catastrophic for the line's future.
Mr. Green pointed out that the journey by rail would he 33 per cent. slower than the road journey if the rail bridge was not built. He said that he hoped that, as £300 million was being spent on the A9 between Perth and Wick there would be some investment in the railway. He said that there was a precedent for help from the Scottish Office and that the European Community looked favourably on equal treatment for road and rail.
That was a considerable launch for an exciting and imaginative proposal. I became involved in considerable discussion and a lightning exchange of letters with

ScotRail in the spring of that year. I made it plain at all times that I had two major concerns about the rail project, and I aired them in public at a meeting I held in Lairg that year. The concerns were that the loop, which has become known as the Lairg loop, should be kept open for a residual service, and that the plan to build the rail bridge should not delay the construction of the road bridge, whose importance to the revival and regeneration of the economy I regarded as paramount. That was always clearly understood to be my position by ScotRail and the Minister.
I wrote to the Minister in the autumn of last year and he replied on 11 November. I raised the question of the timing and asked him to make the assumption that British Rail had found the money for the project. On that basis, I asked whether he anticipated the same time scale for a combined road-rail crossing of the Dornoch firth. He gave me an extraordinarily interesting answer. He understood my concern about timing, but also affirmed much more than I had asked. First, he said that his Department had been in close co-operation with British Rail on the possibility of a joint crossing of the firth. He said that his Department had told British Rail that proposals for a joint venture would be considered favourably provided that they did not delay unduly the proposed road scheme.
How favourably the Scottish Office has considered the project must now be called into question. Indeed, it is part of the purpose of this debate to elicit what is the Government's current attitude to the project in the light of what has happened this week.
Lest there be any doubt about where British Rail stood when the proposal was originally put forward, Mr. Christopher Green, the general manager of Scot Rail as it had then become, said, in a key letter in the history of this affair dated 29 April 1985, that he had had a very useful second round of meetings with the Highlands regional council and the Highlands and Islands Development Board in March, when they were able to summarise the results of their research.
Mr. Green made three points. The first was that the bridge could be built within the time scale of the road works for about £11 million; secondly, that if ScotRail did nothing it would lose 20 to 25 per cent. of its passengers when the new road opened, which put the whole future of the line at risk; and thirdly, that it might just be possible to achieve a financial payback over 30 years for rail cut-off option in isolation.
Those points are of considerable significance. They reveal that a modest sum—£4·5 million to £5 million—was being sought from the Scottish Office. It was clear from public statements that the European Community would meet 50 per cent. of the cost of the project, that the Highlands and Islands Development Board was prepared to meet a substantial tranche of the expenditure—it had said that publicly — and that the Highlands regional council would meet £1 million of the cost.
A modest sum indeed, therefore, was being sought from the Scottish Office, which, the Minister had assured me, was working in close co-operation with British Rail, and had told British Rail that proposals for a joint venture would be considered favourably.
Imagine my astonishment when a Department or Transport Minister announced last week that British Rail could not show that sufficient additional funding would be available from other sources. The funding from other sources that was missing was the £4·5 million from the


Scottish Office. I exploded in rage and anger at the thought that there had been some deception. I do not know where the deception was and I make no charges against the Minister, who did not answer my question and who simply said that he had nothing to add to what he had already said.
This modest sum should be forthcoming for this extremely important project, which has enjoyed the support of the whole community and which, I believe, is supported throughout Scotland. The Scottish Council for Development and Industry said on 29 August last:
We believe that the additional cost of a rail crossing on the agreed road bridge across the Dornoch Firth would be a sound investment in the infrastructure of the Highlands and would secure the future of the rail network north of Inverness.
Mr. Donald McCullum, the council's chairman, said:
It would be a fitting conclusion if these objectives would come together. I hope that the Scottish Office and the Department of Transport will share British Rail's vision and will support this imaginative investment.
The reason for this debate is not to trawl over errors or mistaken decisions. It is to avoid further mistakes being made. Its purpose is to make the Minister aware of the importance of not foreclosing on the option of a rail bridge being built in the future. He and the Scottish Office must not accept for the road bridge a design, for which a competition begins in July, which would be incompatible with a rail bridge. I have asked the Minister to bear this in mind when issuing guidelines when tenders are invited.
I hope that the Minister will give me a positive response tonight, and I am grateful to him for coming to the House at this late hour and for agreeing to see me and my colleagues about this matter later in the week.

The Parliamentary Under-Secretary of State for Scotland (Mr. Michael Ancram): I am grateful to the hon. Member for Caithness and Sutherland (Mr. Maclennan) for raising the question of the Dornoch bridge and the future of the north line. I am particularly grateful for the chance to set the record straight in the light of a considerable amount of misinformation and ill-informed comment that has appeared in the press and elsewhere in the last week.
I realise that post-mortems serve only a limited purpose, but I hope I shall have time to comment on the future of the line to Thurso and Wick. In view of the remarks of the hon. Gentleman, perhaps I should like to begin by establishing categorically three crucial facts. The first is that, when ScotRail initially approached my Department in November 1984 with the suggestion that a rail element be included in the road bridge project, it was given a positive response and the offer of technical assistance.
It was made clear to ScotRail then, and again throughout the following year, that the assistance was being offered on two conditions. The first was that ScotRail should not delay the road bridge project, which the hon. Gentleman supports, and the second was that ScotRail would meet its own share of the costs. Given the ordinary way in which rail projects in Scotland are funded, I hardly think that it would have expected otherwise.
In other words, ScotRail was aware right from the start that in working up its proposals it should not expect any

special Government funding for the project. I would mention, in passing, that British Rail already receives, of course, very substantial annual subsidies from Government and, in so far as the Dornoch crossing is concerned, if it had decided to go ahead it would have stood to save about £1·5 million by combining a rail crossing with the proposed road crossing, by comparison with the cost of building a separate rail crossing. I released last week the full text of a letter which I wrote to Mrs. Winifred Ewing, MEP on 23 April 1985 — and which was quite extraordinarily, selectively and partially quoted in the Glasgow Herald last Thursday to give a completely misleading impression — which made the position on funding quite clear.
The second point which I should like to establish clearly is that neither I nor my Department was ever approached formally by ScotRail with a request for special funding to be made available from Government. Nor did the Railways Board submit any investment proposal to my right hon. Friend the Secretary of State for Transport. It is true that there were continuing discussions between ScotRail officials and my own and on a number of occasions the difficulties about funding were raised. However, at no stage was ScotRail given any indication that special funding from the Scottish Office would be available.
Nevertheless, I did not in the course of consideration of this issue rule out any possibilities of special funding. If a detailed case had been made to me, I would have considered it on its merits. I made this abundantly clear when I wrote to the hon. Member for West Bromwich, East (Mr. Snape) in April 1986 when I said that I would be prepared to look carefully at any proposal that was submitted to me. But no case was submitted. ScotRail, or if not Scot Rail then the British Railways Board, was not prepared to back a scheme, the financial appraisal of which had by then become apparent. I will return to this point.
The third area in which clarification is necessary is that concerning possible European funding. Here, too, we were not prepared to consider recommending European regional development fund grant until we had a detailed application in our hands and could see whether or not it was plausible. It would have been quite wrong of us to have prejudged an issue without all the facts being available. But to obtain the facts we needed an application from ScotRail. We never received it. The Scotsman last Thursday quotes the Member for Caithness and Sutherland as quoting, in turn, European Community officials as saying that there were precedents for ERDF help for projects such as this. That is a self-evident point. Valuable ERDF support has been received in the past for transport infrastructure projects in areas such as the Highlands. As I am on record as having said at a much earlier stage in the consideration of this matter, the proposed Dornoch rail crossing would have appeared in principle a reasonable case for such assistance, but there is an important distinction between eligibility in principle and a satisfactory project on the ground worthy of support.
The case would have to be judged on its detailed merits, and it would have to be judged by the rules requiring value for money that apply in the case of ERDF grants as much as they do in any other case of proposed public expenditure. The European Community rules state that any infrastructure project costing more than 15


million ecus—which is approximately £8·5 million—has to be subject to an appropriate socio-economic benefit assessment. It is there for a purpose, to require sufficient information on the project to be available for a judgment on it to be made. The statements that have been made by hon. Gentlemen in this last week somehow seem to suggest that this could be ignored, or pre-empted. That is simply not the case, and I suspect that they know it. ScotRail too is very familiar with ERDF procedures. It is a frequent applicant to the fund through the Scottish Office, and is currently benefiting from ERDF grant for a number of projects in Scotland. It is therefore well aware of how the system operates. In the light of this, its repeated public statements that 50 per cent. funding of the proposed Dornoch rail crossing would be provided by the European Community were, to say the least, premature.
The hon. Member for Caithness and Sutherland mentioned the Highlands and Islands Development Board guarantees. As I understand it, the HIDB did not give any such undertaking. That was a misquotation on the hon. Gentleman's part. So why then did ScotRail never make a formal application for funding, either by my Department or by the European Community? The facts are plain, and rest in the figures which emerged at the end of ScotRail's consideration of this project. These are that the rail link—even allowing a benefit of some £1·5 million from combining it with the road bridge — would cost £12·7 million. That is ScotRail's own figure, and, in my view and that of my advisers, is likely to be a very conservative one. The purpose of the investment would have been to secure a revenue of some £120,000 a year—that is 20 per cent. of the present passenger custom which ScotRail estimates will be lost if the road bridge proceeds without the rail bridge. I emphasise that these figures are not mine — they are ScotRail's. It is self-evident from them that the investment could not have been justified on any sensible criterion. That is surely why no application for funding was made.
The hon. Gentleman has asked tonight that the options be kept open to allow a rail crossing to be built at a later date, if that proves possible. In the first place, I can give an assurance that the line of the route for the road crossing would not jeopardise any future proposals by British Rail to undertake a rail crossing similar to that planned, and reflected in its provisional order.
The engineering differences between constructing a combined road and rail bridge and a road-only crossing are such that, to design the road bridge on the chance that a rail component might be added later would involve substantial additional expenditure which could not be justified. If, however, British Rail decided to proceed with its scheme as a separate rail crossing in the future, my Department would be prepared to make available to it the results of the substantial amount of preparatory work, including geological and soil investigations, carried out by consulting engineers for the road bridge. I hope that that might be considered helpful.
I should explain why the proposed road bridge across the Dornoch Firth is now proceeding without the rail component. There is no reason now to hold up the road bridge, which shows a positive rate of return on the proposed investment in it. It appears unlikely in the extreme, from ScotRail's figure, that any delay in building the road bridge would lead to any different decision about the rail crossing.
The hon. Member has himself gone on record on a number of occasions, including tonight, to say that the road bridge must not be unnecessarily delayed. Indeed, in July 1984, in the Scottish Grand Committee, he was attacking the Government for being dilatory in building the road bridge. Not a mention then on his part about concern for the railway line, or the need for a rail element. Indeed, the question of the railway did not emerge until some months after the road bridge proposal had been confirmed, and then it did not emerge from the hon. Gentleman. All he wanted then was the road bridge, and he wanted it fast. In saying that, I am sure that he was reflecting the views of almost everyone in the area, who recognised the benefits to be derived from the proposed road bridge. The proposed timetable, subject to the availability of finance and the satisfactory completion of statutory procedures, is for construction of the approach roads to begin in the financial year 1987–88 with construction of the bridge structure itself to follow in 1988–89. I do not believe that the hon. Gentleman is asking me to let this timetable slip, especially after his previous strictures.
I should like to say something about the future of the north line. Hon. Members will by now be aware that ScotRail had made it clear that it has no plans to close the line north of the Dornoch Firth as a result of the decision not to proceed with the rail bridge project. I am aware that that worried the hon. Gentleman and I am sure that he was as pleased as me about ScotRail's announcement that its planned improvements on the line remain unaffected by this decision. It is important to bear in mind that there will be no change in the railway's competitive position vis-a-vis bus operators until the road bridge is complete. ScotRail therefore has several years — until at least 1991—to prepare itself for any increased competition that the road bridge will bring.
Also, although the road bridge will undoubtedly make rail services less competitive on timing than at present, they will still have a number of other competitive advantages which they should be well able to exploit. Many people quite simply prefer to travel on trains, particularly in winter. There must be considerable opportunities for exploiting the tourist potential of the line, especially with the introduction of the new Sprinter trains, which I understand is shortly to take place. There is no doubt that a lot can still be done to market this service, and I am sure that ScotRail will do so with the enthusiasm that it has recently demonstrated on other parts of its network.
Returning finally to the matter of the proposed rail bridge, I hope that I have shown that ScotRail had every possible opportunity to establish a case for its proposal. The reasons why it has been unable to do so and has decided not to proceed with its proposals are patently self-evident. Its reasons are shown in the figures that I mentioned earlier. It is important that the people of Caithness and Sutherland are about to get a splendid road bridge which will improve access for them and contribute to the economic welfare of their area. They have pressed for that. They will also enjoy a considerable improvement in the rail service available to them, both in terms of comfort and reliability, through the new investment that ScotRail plan. I am confident that this offers a real hope for the long-term future of the line as well as for the prosperity of the region.
Obviously, everybody would always like to see the best project available, but, in terms of the figures that I have given the House, the decision taken by British Rail was

understandable. I hope that misrepresentations and misinformation similar to those that were put out about the project during last week will now cease.

Question put and agreed to.

Adjourned accordingly at four minutes to Twelve o'clock.